A new Impact Report from Aite Group, LLC discusses the buy-side portfolio systems technology market and the entrance of several cross-over vendors from the banking, brokerage and treasury sectors.
Hedge fund growth, the need for risk controls and proper valuation, and the increasing use of derivative instruments across a broader population of investment managers, are altering the development queue for portfolio systems. Multi-asset portfolio systems – those with the ability to process all types of assets including non-listed exotic instruments -are now attracting greater interest from buyers.
The global portfolio systems market, which supports all types of asset management firms, reached approximately US$2.32 billion as of year-end 2006, and is expected to reach US$2.67 billion by year-end 2010, representing an annualized growth rate of 2.8 percent.
“Even if buy-side firms are not currently engaged in a high volume of OTC trades, they are aware that further down the road, a change may take hold. To that end, buy-side firms are querying technology vendors on the solution’s ability to process these instruments today and in the future,” says Denise Valentine, senior analyst at Aite Group and author of this report. “We anticipate eventual convergence of traditional and multi-asset portfolio systems.”