Numerix will be incorporating the technology and clients of TFG Financial Systems as the result of a recent acquisition.
Pricing and quantitative risk analytics vendor Numerix’s acquisition of TFG Financial Systems will create opportunities for Numerix to increase its buy-side coverage via expanded offerings that stretch across the front-, middle- and back-office.
The combination of each vendor’s offerings will yield new support for middle- and back-office operations, says Steve O’Hanlon, CEO of Numerix, in response to questions from FTF News. Numerix acquired TFG for an undisclosed amount.
“Seventy percent of our clients are sell side and 30 percent buy side, and we see this as an opportunity to increase our buy-side coverage with a complete offering (back-, middle- and front-office) that will position Numerix differently in the market,” O’Hanlon says.
TFG brings with it “significant inroads into the hedge fund and banking space, gaining several new clients globally in the last 12 months,” says Barry Fenwick, CEO of TFG, in a prepared statement. The acquisition “will allow us to take our solutions to a more diverse client base and be leveraged to address a wider range of market needs.”
The TFG staff members “bring decades’ worth of market knowledge across risk management, development and performance technologies,” Fenwick says. “The deep practical knowledge, experience and IT understanding of our joined staff will give us unique insight into recognizing opportunity for our clients.”
In particular, TFG offers dependency graph capabilities that are the core of its software as a service (SaaS) risk and portfolio management systems, and technology framework, officials say. These core real-time, distributed, event-driven processing capabilities will be leveraged via the Numerix Oneview enterprise trading and risk solutions. The combination of offerings will support automated structured products distribution, trading, risk management, hedge fund operations and fixed income market makers.
The acquisition of “TFG’s event-driven buy-side and sell-side platform” has extended Numerix’s position and is a response to “market demand for cost-reducing architectures that combine hybrid data management, analytics, workflow and visualization,” says Peyman Mestchian, managing director of Chartis Research, in a prepared statement.
In fact, Numerix Oneview Asset Management, formerly TFG Complete, provides Numerix with “a turnkey SaaS based real-time front-to-back office solution to immediately begin working with a range of new buy-side institutions, including hedge funds who operate global macro style strategies, as well as endowments, pension funds and sovereign wealth funds,” according to Numerix.
“One of the most exciting technology advancements of TFG is their real-time distributed calculation engine with graph technology,” O’Hanlon says. “This technology — which many financial institutions have tried to build, and failed —enables true ‘real time’ calculations. This technology as well as other key components that TFG has developed will be incorporated and expanded in the Numerix Oneview Enterprise Platform.” A single database will support front- and middle-office risk management via real-time, cross-asset pricing, risk analysis and trade management.
TFG’s dependency graph technology is “for connecting server systems that speak to each other in an event-driven real-time, efficient way,” explains Satyam Kancharla, chief product and strategy officer for Numerix, in a statement. “The streaming Directed Acyclic Graph, or DAG technology, triggers modules only if data [end-users] depend on changes, maximizing efficiency and throughput. As such, the system can calculate VaR [value at risk], Greeks and carry out stress testing on a sub-second basis, or price 25,000 interest rate swaps per second in volatile markets,” Kancharla adds.
“All current clients on the [Oneview] platform will continue to be fully supported, and users will have the opportunity to upgrade to the new platform, once released,” O’Hanlon tells FTF News.
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