Sophis is entering the data management arena with Data Service, a new module to support its existing Risque and Value portfolio and risk management products. The new combined solution is set to go live with a large hedge fund client in London, and Sophis has also signed up clients in New York and Germany.
Sophis believes the data management module will help fuel its international growth by addressing one of the key issues that consistently emerges during client implementations, says Daniel Abitbol, product manager for Value. Although larger investment banks often have substantial data management operations of their own, mid-sized investment managers and hedge funds – Sophis’ stronghold – generally do not.
Abitbol says, “Our new data module enables us to speed up implementation to a matter of days, rather than weeks, which it takes when we have to implement data integration at each individual client site.” This obviously saves on resource, so where Sophis has turned down some contracts where it does not have a physical office, says Abitbol, it can now take them on.
The French company, founded in 1985, is aiming for significant international expansion. It currently has 28 clients for Value, with around 400 end users, compared with seven last year, and a planned 50 by the end of this year. “The U.S. in particular, as well as London, markets are pre-senting us with the biggest opportun-ity,” says Abitbol. Germany is also offering potential, given its recent rule changes that have seen the first hedge fund Aquila Capital emerge, which has become a client of Sophis’.
As instruments being traded become ever more complex, says Abitbol, complex derivatives are no longer the domain of just hedge funds. As such, Sophis expects to see more demand from the more traditional asset managers as they look for systems capable of handling the complex data management challenges.
Data Service will be offered as a module to support existing products, rather than as a standalone service, although this may still be considered. To do this would require further development work to separate the capabilities from the processes involved in the portfolio and risk management products.
It is not being positioned as competi-tive to other reference data manage-ment systems, such as Asset Control, DST, Eagle Investment Systems or GoldenSource. This is primarily due to its focus on the derivatives market, which Abitbol points out requires the ability to handle more complex calculations than traditional equities or fixed income markets.
The interfaces to data sources has been based on customer usage, and includes Reuters, Bloomberg, Telekurs Financial (VDF), and Sophis’ own Convertibles On-Line (COL) database of convertible bonds data.
The company has also just entered a strategic partnership with Markit to integrate Markit’s credit price and reference entity data (RED), as well as dividend forecasting service previously known as DaDD (for more on Markit, see box Page 6). Abitbol says up to 10 of Sophis’ clients use Markit data and had requested it through their products, leading to the partnership. This is in line with Sophis’ strategic move into credit derivatives, according to CEO Hervé Vinciguerra.
External data can be mixed with a client’s proprietary data, and any conflicts between multiple sources can be prioritised by source down to the instrument level, and exceptions notifications can be sent to administrators.