Hedgeweek Votes Liquid Best Risk Provider

Hedgeweek Votes Liquid Best Risk Provider
Best Risk Management Software Firm: Liquid Holdings

New York-based Liquid Holdings offers a significant real-time risk management solution to the hedge fund community. Its cloud-based Liquid platform integrates portfolio and risk analytics by leveraging the firm's heritage in bringing next generation technology expertise to the hedge fund community.

There is no doubt that risk management has evolved significantly in recent years. Once regarded as a secondary function that took place between the closing and opening bells, today risk management is an integral part of how a hedge fund operates.

The Liquid platform uses a large high-scale low latency database that allows vast amounts of information to be imported and interrogated for decision making purposes by portfolio managers, Chief Risk Officers etc. This gives them an holistic view of their firm's true risk, performance and P&L in real-time, as new trades are executed. In effect, it is helping bring risk management firmly into the front office where continuous real-time risk monitoring can be carried out in tandem with portfolio management. Not only is this bringing a degree of operational alpha, it is something that institutional investors increasingly expect to see when selecting the best managers to allocate to.

"Our clients benefit from our risk system in four ways," says Robert O'Boyle, Liquid's Executive Vice President and Director of Sales & Marketing. "They are:
  •     Real time access to sophisticated, comprehensive analytics for enhanced decision support
  •     Provide management and investors with complete transparency into the drivers of performance and risk down to the most granular details
  •     The ability to monitor those drivers at any-time anywhere
  •     All holdings in the portfolio are accurately priced due to our managed services, which handle all end-of-day processes on behalf of our clients.
Liquid is always looking at ways to innovate and expand the level of functionality within its risk system, which it does through the usage of the Agile development methodology and its SaaS offering, according to O'Boyle, who says: "In addition to the continued expansion of analytics we recently released controls that allow our clients to build custom reports on the fly."

Asset raising remains one of the biggest challenges for managers. Those that succeed tend to be the ones that can manage an institutional allocation alongside business risks.

"We expect to see higher adoption rates of real-time risk controls at the pre- and post-trade level so fund managers can showcase sound, repeatable controls are in place to manage the investments they have today, and the investments they expect to have in 24 to 36 months down the line," comments O'Boyle.

Indeed, the whole dialogue around risk management has changed thanks to advances in technology. Years ago it was more a qualitative discussion. Today, it is highly quantitative. Investors want to know how long it would take to liquidate the portfolio. What impact would it have on their investment? And within that liquidation period, which exact holdings can be exited straight away?

"Operational risk and business risk continue to be a focus for the investor. Manager pedigree and performance matter but now more than ever investors want to invest with funds that are built to last," says O'Boyle.

The breadth and depth of risk and performance data in Liquid's risk system, which operates on a single multi-tenet database, sets it apart from many of its competitors as managers move into a real-time risk management environment.

On winning the award, Liquid CEO Brian Storms comments: "We are delighted once again to be recognized for the Liquid platform's risk management capabilities, which are proving to be critical to the success and institutional credibility of our growing client roster. Our platform's real-time, position-aware analyses update as executions are confirmed in our trading systems or received from third parties.  This assures investors that their allocations are being managed with institutional-quality, repeatable controls adept at handling the most volatile market conditions."

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