Forging ahead to the buy side

Anvil Software is an independent software developer and technology consultancy that specialises in front- and middle-office systems for global financial institutions. The firm was established in London in 1988 by four university friends – Joe Nicholson, James Dalby, Simon Deal and Michael Kelly – who met at University College London and who are all still directors.

Anvil has since grown into a multinational software firm with a global headcount of 95 and offices in London (55 staff), Malta (15), New York (10), Toronto (10), and Sydney (5).

This year's turnover is (conservatively) forecast to be £8.2 million, up from £6.75 million in 2005 and £5.3 million in 2004.

Products

Anvil's main products are:

• Anvil ARTS – a front- to back-office system for international repo, securities finance and agency lending, covering the fixed income and equity markets;

• Anvil Denarius – a front-office platform covering trading, position tracking, reporting, profit and loss (P&L), risk; as well as compliance for bonds, money markets, foreign exchange (FX), futures, repos, swaps, equities, options and credit;

• Anvil Order Management – an order management system that connects front-office position management and trading systems to electronic markets, allowing straight-through processing (STP) from order placement to execution and settlement;

• Anvil Carry – a communication system that is designed to deliver cost of carry information to traders, management, and accountants;

• Anvil Consulting – a consulting service focused on improving clients' business performance through the use of technology.

Denarius

Anvil Denarius is a front-office system covering trading, position tracking, reporting, P&L, risk and compliance for a variety of asset types including bonds, money markets, FX, futures, repo, swaps, equities, options and credit. It is also a multi-product, multi-entity, multi-site and multi-currency system that Anvil says is ideally suited for organisations seeking to simplify their front-office trading and tracking functions via a single application. According to Anvil, Denarius was conceived and developed from mid-2000, in response to the lack of continuity between existing systems and the complexity of managing a hybrid array of independent applications. The initiative received a boost with its first 'early adopter' sale to a major Scandinavian asset manager (which cannot be named due to a non-disclosure agreement).

Anvil Denarius provides real-time trade capture position tracking, internal order workflow, external exchange/broker order management, risk management, P&L accounting; and reporting for fixed income, credit, equities, money markets, repo, FX and derivatives, including options, futures and swaps.

Denarius offers:

• Real-time, multi-entity, configurable global position management;

• Wide range of asset coverage;

• Trade capture/execution in real-time;

• Centralised order management for trading on multiple electronic exchanges;

• Risk management, compliance/limit checking, and carry flexible reporting, including P<

• Security controls and full audit trails;

• STP to middle/back offices;

• Integration with in-house and third-party systems;

• Modular – clients install only the modules relevant to their business.

Pricing

Because of its modular design, users tend to buy only the functionality they require so price is contingent on the modules implemented and scale of use in terms of user numbers and sites.

Anvil says it is 'flexible' on pricing structures, as it recognises that small start-ups have widely different needs compared with large, well-established organisations. For large sites, price is determined by an unlimited user licence per site per year or for a fixed (five-year) term for the modules required. For smaller sites Anvil typically reduces the overall cost, although it does restrict the user licences. This is to protect Anvil's commercial interests in the event that it is acquired by a larger group that then decides to roll Denarius out on a greater scale.

Generally, a large, global roll-out across many sites will cost in the region of hundreds of thousands of dollars annually in licence fees. A smaller implementation, such as Northcross Capital for example, would be far more affordable.

Clients

Denarius currently has four installations:

• Northcross Capital in London;

• Wachovia (Anvil Carry module);

• A tier-one New York-headquartered bank using Denarius for prime brokerage;

• A major Scandinavian fund manager.

While Denarius's client list may not be particularly long, it is broad. Denarius is used by one of the largest tier-one New York-headquartered banks in its prime brokerage operation, by a large European asset management operation, and by a 'lean and mean', five-man structured products special purpose vehicle in London.

Competitors

Anvil has competitors for individual aspects of Denarius:

• Calypso;

• Reuters Kondor+;

• Bloomberg;

• Front Capital Systems;

• Martini;

• Summit Systems;

• Murex.

Technology

Denarius is a three-tier system comprising a database, a server process suite (encompassing all processing and business logic) and a thin GUI (graphic user interface). Servers run on Unix (Solaris or Linux), the database is any ODBC/ANSI92 SQL-compliant platform (Sybase is recommended/supported), and the client operating system is native Windows 2000, NT or XP.

Core programming is mostly written in C++ and the middleware is primarily Corba/IDL. Interfaces to servers and database schemas are accessible to clients and documented in detail, making them directly accessible to clients' programming teams and to third-party tools such as Crystal Reports.

Interoperability with other systems is supported by a range of existing interfaces and interfacing tools: CSV (comma separated values), XML and IDL-based (interface definition language) to support data import/export are readily accessible, and many existing mappings/interfaces can be implemented with any particular installation.

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