Napier Park, a $6.7 billion credit and fixed-income fund formerly known as Citigroup Capital Advisors (CCA), has tapped Sky Road, a Chicago-based managed services provider to the buy side, to help transition its trading application infrastructure into independent operations in accordance with Dodd–Frank's Title VI.
The collaborative project among Napier Park and Sky Road's technology teams allows the newly separate alternative asset manager to comply with the Volcker Rule well ahead of its July 2014 deadline, by migrating its trading operational systems to an independent datacenter and taking over daily IT support from its previous backers at Citi.
"The relationship really goes back further even than CCA, to when some of Napier Park's principals, including COO Michael Williams, were at Carlton Hill Global Capital. The big change in the past year was simply the scope," says Eiman Abdelmoneim, Sky Road's director of product strategy. "That broader, core support includes Napier Park's front- and back-office systems, market data interfaces, trading and reconciliation flow with its prime brokers and fund administrators, as well as risk processing. But both partners got into this with an acknowledgement that to achieve full Volcker compliance, it takes more than just pure technology alone."
Napier Park completed its legal separation from Citi in February of this year, but Abdelmoneim says a broader combination of people, processes, and IT is involved the switch, which can only be successfully achieved by first taking a step back to examine both sides of the spinoff.
"The key dynamic with Volcker is the timeline, and the end objective is continuity," he says. "You have to start with the end-user, what they're doing, why, and who they're interacting with, and then determine how the technology facilitates that, or the action they'd like to complete. So these projects vary greatly. There is a technical impact, in so much as when a fund operates within the walls of a larger entity, it might come to rely on certain systems and processes that are proprietary within the bank to drive certain strategies, and if those are located within the bank's other business lines, they might not be able to move outside as easily. Each case, in that sense, is different, and will therefore have to do with the parent entity [in this case, Citi] as much as they do with the new one."
Napier Park's COO Williams, meanwhile, says Sky Road's managed services model will help extend the partnership further down the line. "In light of the rapid delivery requirements, we needed a partner with both the domain expertise and track record of managing and developing trading platforms end to end. Sky Road was a critical part of the team that delivered ahead of schedule with zero disruption to our business processes, and as Napier Park continues to grow, we are confident that Sky Road will enable us to build upon and streamline our trading and risk platforms to best serve our investors."
As for similar spinoff implementations leading up to next July's deadline, Abdelmoneim has few doubts that they'll be growing, too. "We absolutely expect to see more," he says.
Anthony and James delve into how the systematic internalizer regime is shaping up, and then examine the regtech sector.Subscribe to Weekly Wrap emails