SimCorp and MSCI are developing a direct data and analytics link between the former’s Dimension investment management solution and the latter’s RiskManager platform with a view to offering users of both products operational efficiencies and support for better informed investment decisions. A link between Dimension and MSCI’s BarraOne risk management solution is also on the roadmap.
An initial interface and workflow allow common clients of SimCorp Dimension and MSCI RiskManager to load position holdings from Dimension directly into MSCI RiskManager, which includes a time series-based, granular risk analytics model and is typically used in the middle office. RiskManager calculations, including value at risk, are then reported back and stored in a separate database built by the Dimension user to house risk information.
Moving beyond this initial solution, which is available immediately and has been deployed by Swiss & Global Asset Management as a pilot customer, the companies intend to report the results of MSCI’s RiskManager calculations directly to SimCorp Dimension. This will give SimCorp Dimension users easy access to back-testing, value at risk calculations, historical data and analytics, reducing operational complexity and providing a clearer picture of risk exposure to support investment decision making. Data consolidation within SimCorp Dimension is also expected to make data more accessible for reporting, improve data consistency and reduce data storage and management costs.
This element of the solution will close the loop between SimCorp Dimension and MSCI RiskManager and be available in the third quarter of 2014, ahead of fourth quarter availability of a similar interface between SimCorp Dimension and MSCI BarraOne, which includes a fundamental factor risk analytics model and is typically used in the front office.
While users of both SimCorp Dimension and MSCI RiskManager can link the products by building middleware, Derek Kannenberg, Product Manager, Risk Management Analytics, MSCI, describes the task as onerous in terms of building and maintaining a solution that can prepare the detailed data required for risk calculations.
Else Braathen, domain manager, Risk Management at SimCorp, adds: “Our clients asked us for help to develop an interface between SimCorp Dimension and MSCI’s RiskManager because it is not easy for them to do this. We expect all our buy-side clients, whether or not they are also MSCI customers, to find this interface and workflow solution compelling.”