Pricing and valuations is, by any measure, a mature space. So, when TriOptima decided to enter the market, it knew that it had to do something different to the incumbent providers. In 2016, it launched its triCalculate Valuation business, which, at a high level, offers risk analytics-as-a-service. Initially focused on counterparty credit risk measures, the offering has grown substantially since then, leading it to clinch the win in this highly competitive field for the best buy-side pricing/valuation service in this year’s Buy-Side Technology Awards.
For TriOptima and many of its clients, it couldn’t have come at a more opportune time. This part of the industry is going through a period of enormous change at present, prompted by regulatory provisions around the calculation of initial margin for non-cleared instruments, and the rollout of the Standard Initial Margin Model (Simm) developed by the International Swaps and Derivatives Association (Isda). Thomas Griffiths, co-CEO of triCalculate, says the first clients that signed up were phase-two clients under the uncleared margin rules, and that gave the business ”the initial boost to really put a lot of effort into building out the service.”
The real trick with triReduce Valuation isn’t that it works with other systems—which it does—but that it can be coupled with TriOptima’s other offerings in collateral management and margin calculation to provide an “end-to-end solution for clients who have these requirements under the new regulation,” Griffiths explains. While the service can be taken on a standalone basis, Griffiths says the more services that are taken, the greater the automation benefits, from sending in a trade and conducting analytics on when thresholds are likely to be breached, through to dealing with margin calls and reconciliations at the other end.
In addition, the software is delivered via web interfaces and a private-cloud infrastructure, while onboarding times are rapid—triReduce estimates that new clients can begin receiving valuations for cross-asset over-the-counter portfolios, including exotic instruments, in as little as one to four weeks. The process is fed with market data from NEX Market Data and Thomson Reuters, with the use of that data included in the service fee, itself modeled on a pay-as-you-go basis.
“We see ourselves very much in a disruptive role,” Griffiths says. “We see ourselves as being the new kid on the block, and we’re looking to leverage the trusted brand that TriOptima has among its clients in a new space, in pricing and valuations.”
Bryan Cross, who heads UBS Asset Management's QED group, joins to discuss alternative data and AI.Subscribe to Weekly Wrap emails
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