Governance, Risk & Compliance

Governance, Risk & Compliance

April 01, 2011

IPM Engages DataArt for Development of Risk Management System

Hedge funds always involve risk. So, a risk management system is necessary. In this regard, a European hedge fund company called as Informed Portfolio Management AB (IPM) has chosen DataArt to develop a risk management system that can calculate risk and provide portfolio exposure metrics for several strategies and asset classes, such as currencies, commodities and equities.

According to IPM, it currently manages assets exceeding eight billion dollars of some of the world's most sophisticated pension funds, sovereign funds and other institutional clients in GTAA, currency management, equity management commodity and multi strategies.

Being voted as the Global Pensions Hedge Fund of the Year 2011, IPM wanted to customize some of their current risk management solutions, such as integration of the existing market data systems with an additional third-party risk management system, and more. Consequently, IPM extended its engagement with DataArt into 2011 as well.

The new risk management system encompasses a Web-based application that calculates various portfolio risk measures such as VaR (value at risk) metrics and exposure for the different types of accounts, managed by IPM.

In addition, the new risk management system developed for IPM even ensures regulatory and contractual compliance and can perform back-tests on the current portfolios using an extensive array of historical market data. The system can calculate the tracking error for each portfolio as well. All these functionalities are important for hedge fund operation because per-account risk budgeting is a strict requirement for larger institutional clients of IPM.

According to DataArt, the new Web-based risk management application is currently used by IPM to manage assets on behalf of some of the largest European pension funds, major asset management firms, and banking institutions.

“In DataArt we found a trusted technology partner to support our operations," said Anders Lindell, executive VP at IPM, in a statement."DataArt´s proven expertise with building front to middle integrated solutions and, specifically, model calculations was crucial for building a robust risk mitigation system we had envisioned in a timely manner.”

Alexander Makeyenkov, SVP of Capital Markets at DataArt, said in a statement, “In the post-crisis landscape we see strong recovery signals in the asset management space, and the new regulations only add more requirements to software initiatives that have been frozen for the last few years. The time-cost saving attribute of service is crucial today, and that´s why DataArt has an attractive proposition for buy-side clients: we offer expertise in serving financial clients with a hybrid of onsite/near-shore delivery model.”

In  November 2010, DataArt had developed a Windows Phone (News - Alert) 7 (WP7) mobile search application for London-based Wagumo Limited.

Jayashree Adkoli is a contributing editor for TMCnet. To read more of Jayashree's articles, please visit her columnist page.

Edited by Jennifer Russell

blog comments powered by Disqus