SunGard says Toronto-based Lionhart has selected the Monis Convertibles XL analytics libraries with the credit module for credit default swap and asset swap analysis. It will be used by traders and risk managers in Toronto, New York and London, for trading and risk management of its convertible arbitrage strategies.
Lionhart is an independent investment advisory company specializing in equity-linked, market-neutral global arbitrage strategies. Monis will provide Lionhart with the necessary analysis and functionality to help identify arbitrage opportunities and to manage risk exposure.
“We selected Monis because it provides the best model, the best front-end functionality for convertibles and the widest coverage of the market – including the range of other equity and credit instruments we use as part of our trading,” says Terrence Duffy, managing director and chief executive officer of Lionhart. “We also believe that SunGard has a good understanding of the market and our needs as traders. This, along with the company’s financial strength, gives us confidence in the future evolution of its products.”
As the convertible bond market grows and evolves, Monis says it is experiencing increasing demand from hedge funds and the banks and service providers who serve that market. In addition to Lionhart, the Standard Bank Group Limited Societie Generale and Wake Asset Management SA have recently elected to use Monis in support of their convertible bond strategies.
Monis’s convertible bond model includes comprehensive coverage of the many different types of convertible and equity-linked securities. As convertible arbitrage strategies become more diverse and employ a wider range of other asset classes, Monis Convertibles XL has now been extended to include equity and equity options, interest rate futures and swaps, credit default swaps and asset swaps.
Lionhart began immediate usage of Monis Convertibles XL in a Microsoft Excel environment, as it implements the pricing and analysis libraries over the next few months. The Monis analytics will then be integrated into a custom, Web-based, proprietary front-end. Monis is available as a spreadsheet package, as a stand-alone front-office system (Convertibles Analyzer), and, as in the implementation at Lionhart, as libraries for integration into a wide variety of third party and in-house systems.
“We’ve seen tremendous demand for the Monis solution suite over the past few years, from the expanding hedge fund sector and from the hundreds of banks and service providers selling into the hedge funds,” says Emanuel Mond, president of the Monis operating unit of SunGard Trading and Risk Systems. “As we see the industry evolving our priority is to stay close to the people who are trading and developing new strategies. We look forward to continuing to work with Lionhart, which is now one of over 150 hedge funds using Monis, mainly in the area of convertible arbitrage.”