With this acquisition, Sapient will add a globally integrated service in derivatives processing to the market-leading capabilities of its Trading and Risk Management (TRM) practice, which has been a key driver in Sapientâs growth. The addition of DCG will dramatically increase Sapientâs ability to address derivatives operations issues and further strengthen its unique position in the marketplace.
Sapientâs expanded TRM services will now include unique operations benchmarking, deep derivatives and process expertise, operations support, technology services and proven off-shore capabilities. These will help clients both manage the growth and complexity of derivatives transactions and eliminate the inefficiencies they currently experience in derivative operations.
âToday's volatile markets and increasingly strict regulatory environments make this an opportune time to add DCGâs capabilities to our TRM practice,â said Sapient President and Chief Executive Officer Alan Herrick. âRegulatory scrutiny has resulted in new demands on clients to maintain compliance and reduce the risk associated with the growing complexity and volumes of these transactions. Our TRM practice is already well established and this move will bolster our opportunities, both in the current uncertain times and in future growth markets. TRM and our interactive services represent the fastest growing parts of our business.ââ
David Easthope, senior analyst at Celent, a Boston-based financial research and consulting firm, concurs: âGiven the growth in this area, clients are looking to partner with firms that can help them define and manage their derivative processes from start to finish. This allows them to reduce costs while strengthening their ability to respond to the regulatory and compliance demands associated with complex derivatives trading and processing.â
Sapientâs acquisition of DCG is supported by a number of key global trends. The worldwide derivatives market reached $677 trillion notional in 2007 and continues to grow dramatically, according to Celent. While derivatives volumes have grown, there has been a lag in operations infrastructure investments. This has created greater demand for operations support and technology. At the same time, government agencies such as the U.S. Federal Reserve and the Financial Services Authority have increased the regulation and scrutiny of derivatives transactions, further compounding the existing operational challenges.
DCG will operate within Sapientâs TRM practice, which provides high-end business consulting, program management, technology delivery and process outsourcing solutions focused on the specialized needs of risk enterprises. Key clients of the practice include the leading firms in the investment banking, asset management, hedge fund, insurance, oil & gas, utilities and agricultural sectors.
âAs the premium choice for the worldâs top global investment banks, we were eager to realize our full growth potential by combining our offering with Sapientâs strong business consulting, technology and outsourcing capabilities,â said Cameron Munro, co-chief executive officer, DCG. âThis acquisition makes perfect sense for our clients and our organization. Our vision and culture map very closely to Sapientâsâand together we can provide a powerful and unique set of solutions for our combined client base. We are thrilled with this opportunity.â