Front Capital Systems, part of SunGard, has bought Chicago-based Derivatech Risk Solutions, a provider of foreign exchange derivatives pricing, analytics and risk management systems. The price was not disclosed.
Founded in 1996, Derivatech was privately held and has offices in New York, London and Chicago. Its dt Compass trading and risk management system for FX derivatives is currently used by a number of FX market participants.
The dt Compass solution, which will continue to be supported and sold as a stand-alone product, is intended to augment Front’s existing FX options offering in the FRONT ARENA product suite. FRONT ARENA is a front-to-back office trading system that spans equities, foreign exchange and money markets, fixed income and repos, interest rate derivatives and credit derivatives.
Derivatech’s products provide volatility surface modelling; pricing and valuation of exotic options and structured products; risk derivatives calculated from a volatility surface; a model development kit, and strip pages.
“In addition to the dramatically larger asset class offering provided in FRONT ARENA, Derivatech will now be able to offer an even greater level of FX and FX derivatives software solutions, services and support,” says Nicholas K. Hatzopoulos, chief executive and co-founder of Derivatech. “Leveraging our widely acclaimed and innovative approaches to providing comprehensive FX derivatives solutions with Front’s product line will help bring tremendous value to our customers.”
The Front and Derivatech operations will be combined worldwide, with Hatzopoulos and John Hatzigiannis, software development manager, playing key roles.
“Derivatech’s expertise in foreign exchange derivatives for trading and risk management is an important addition to Front’s otherwise comprehensive offering. This is truly an exciting move that will provide our customers and the industry with one of the broadest ranges of products and services available in the industry,” adds Jonas Lindstrom, president of SunGard’s Front Capital Systems.
Front Capital Systems provides automated processing solutions for sales, trading, risk management and administration of equities, derivatives, interest rates, credit, money markets, fixed income and foreign exchange.