Front Office Trading

Digiterre Builds Fixed Income Trading System for a Multi-Billion Dollar London Hedge Fund

 

Background

Digiterre has been engaged by a large, multi-strategy, London based hedge fund manager to build their front office trading and risk management systems. The system is now in its second phase of development, following the successful on time deployment of phase one of the build.

Business Requirements

To support continued growth and to improve its risk management capabilities, the organization wanted to put a front-office decision support system in place. This was needed to provide valuation and market risk reporting for traders and risk managers on a full range of fixed income and interest rate derivative products. The company wanted a solution that was more robust, scalable and auditable than a spreadsheet-based application and has its own library of financial analytics models developed in-house.

However, a key factor in the decision to build a front-office system was the need to ensure consistency with existing spreadsheet applications and to maintain complete control over the analytic models used. The only way to achieve this was to develop their own bespoke system, built on top of the analytics library.

In-House or Outsourced Development?

The next decision was whether to build the system using in-house resources or by partnering with a third-party software development company.

Despite already having considerable technical resource within the quantitative research group they recognized that that there is a fundamental difference between developing spreadsheet applications and designing and engineering a robust, scalable and flexible trading system from the ground up.

They wanted to work with a financial services technology provider where they would have a direct line to senior people and one which offered the right combination of flexibility, agility and attentiveness coupled with the required developer resources located very close to their London office. They chose Digiterre because we offer these benefits plus we have extensive financial markets knowledge combined with our track record of building and supporting large scale applications.

A Successful Outcome

The result of this partnership is a controllable and flexible solution built using Microsoft's .NET platform, which is ideal for the rapid development of this type of business application software. The system provides traders and risk managers with an accurate intraday picture of market risk at every level - from an individual strategy to a consolidated view across the entire business. The system implements the firm's proprietary analytic models within an application which is robust, scalable and auditable. Phase two of the system is now under way to extend the product coverage and add more functionality.