Hedge fund growth, the need for risk controls and the increasing use of derivative instruments across a broader population of investment managers are driving the global portfolio systems market, according to a new report from Aite Group. In particular, the Boston-based firm says multi-asset portfolio systems -- those with the ability to process all types of assets, including nonlisted exotic instruments -- are attracting increasing interest.
Overall, 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, for an annualized growth rate of 2.8 percent, according to Aite. "Even if buy-side firms are not currently engaged in a high volume of OTC [over-the- counter] trades, they are aware that further down the road a change may take hold," relates Denise Valentine, senior analyst at Aite Group and author of the report, "Multi-Asset Portfolio Systems: The Buy Side's New Pied Piper." "To that end, buy-side firms are querying technology vendors on [their] solutions' ability to process these instruments today and in the future."
Valentine adds, "We anticipate eventual convergence of traditional and multi-asset portfolio systems."Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio