Microgen IVR responds to Asset Managers OTC pricing and risk compliance needs

22 January 2008

In response to the significant levels of regulation arising from UCITS III, MiFiD and other local regulatory changes within the European Asset Management market, and the increasing use and demand for OTC derivatives to feature in portfolios managed by many Asset Management companies, Microgen has launched a new Microgen Aptitude ® based solution in partnership with NumeriX and Independent Risk Monitoring Limited (IRML).

The solution, Microgen Independent Valuation and Risk (IVR), is aimed at meeting the immediate challenges facing Asset Managers and their service providers in relation to the increasing use of OTC derivative based products. Microgen IVR provides an integrated solution for independent derivative valuation and portfolio risk and compliance reporting and is based on the many years of experience Microgen has gained by working in both front and back office administration, performance measurement/analytics and fund & product design. Including the company’s extensive experience gained in both the Retail and Investment Banking sectors.

Collaborating with NumeriX and IRML, Microgen IVR delivers a best of breed solution. The solution has been built using Microgen Aptitude®, a market-leading BPM Suite which can integrate to, and augment, most asset management systems. Microgen IVR has been specifically designed to integrate, enrich and manage the data required to automate the processes, error correction and valuation of non-standard OTC derivative products. Microgen IVR also generates the portfolio analysis in the areas of risk and compliance, such as VaR calculations and UCITS III compliance checks.

Managing Director of Microgen’s Asset & Wealth Management Division, Tom Crawford commented: “During the last 12 months Asset Managers have become more and more active in the OTC markets. Traditional core Investment Management software is not always able to support the valuation and risk management of these portfolios. We spotted this obvious gap in the market, and in collaboration with NumeriX and IRML are delivering a customisable solution, with a choice of maths libraries, which can augment any existing technology platform, and automate the key areas of valuation of OTC derivatives and portfolio risk and compliance analysis.”

COO of NumeriX LLC, Steve O’Hanlon added: “As Asset Managers benefit from the yield enhancement and risk profile flexibility of OTC derivatives and structured products, there is a responsibility to have the tools and systems to manage the resultant exposures. NumeriX has worked hard to provide a usable deal capture language and cross asset model suite to satisfy such pricing and control requirements. Delivered within the Microgen Aptitude suite the user has the perfect combination of user friendly access to these sophisticated tools.”

Finally, Managing Director of IRML, Yves De Naurois commented: “Pricing OTC derivatives and analysing their potential impact on portfolios’ risk profile are two sides of the same coin. The combined expertise of IRML, Microgen and NumeriX brings an integrated and flexible solution which allows portfolio managers to implement innovative investment strategies and removes many of the complexities required to ensure that the portfolios continue to comply with the pre-agreed risk profile.”

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