In-house Adventage

Advent software is synonymous with the buy side, especially the alternative asset management space where any technology discussion would seem incomplete without mentioning the San Francisco-based firm, with a client list in the thousands. Victor Anderson reports.

Advent Software is a buy-side focused multi-national technology company founded in 1983. The company provides technology to asset managers, hedge funds, fund administrators and prime brokers, as well as wealth managers including family offices and private banks. Advent has a total client list in excess of 6000, of which there are 500 hedge funds and an additional 500 long-only asset managers. Institutions in more than 50 countries use the firm's technology, managing investments totalling more than €8 trillion. The client breakdown is approximately 80/20 (global to US) based on assets under management. The numbers of US institutions, however, account for a significantly higher proportion of the firm's total user numbers, although the large UK and European asset management institutions on its books skew this distribution. Advent has offices in the US – the firm's head office is in San Francisco with a headcount of more than 800 – and across Europe including offices in London, Zürich, Amsterdam, Athens, Stockholm, Oslo and Copenhagen.

All Advent's products are designed as part of a suite, although the firm is quick to point out that they can be implemented on a best-of-breed, standalone basis.

Advent's key product in the fund administration and alternative asset management space is Geneva, a real-time portfolio and fund accounting system. According to Advent, Geneva is currently being used by seven out of the world's top 10 prime brokers and by six out of the top 13 hedge fund administrators, based on assets under management. This makes Geneva the most widely used system among hedge fund service providers globally.

Geneva has also been taken in-house by a number of hedge fund managers with complex strategies to achieve timely and flexible views of their portfolio data, including profit and loss on any fund level and strategy. The platform's strength lies in its scalability allowing businesses to consolidate multiple systems as well as grow in terms of taking on more clients, funds, trades and strategies.

Advent Office is an integrated suite of applications designed to address all the requirements of wealth managers, family offices and private banks, as well as asset managers and hedge funds with fairly straightforward strategies. The platform supports all investment management processes, including portfolio modelling, trading and order management, pre- and post-trade compliance, portfolio management, client and management reporting, as well as customer relationship management functionality tailored for investment managers.

Moxy, a Fix-enabled order management system, is an integral component of Advent Office, designed to automate manual trading and order management processes, integrating with other Advent Office components to enable straight-through processing. This integration helps eliminate re-keying of portfolio accounting information and supports information sharing.

Advent also offers Axys, a portfolio accounting and reporting system, another element of the firm's Advent Office suite.

Pricing for Advent products is typically based on:

• The level of functionality (modules) deployed by the user

• Numbers of concurrent users

• Assets under management or administration.

The above variables make Advent's pricing flexible in the sense that clients are able to scale their level of usage and price according to their business needs. Geneva can be installed in-house or delivered as an ASP and Advent Office is mostly installed in-house, although certain clients are using an ASP version of the application. Perpetual and term licenses are offered on all Advent products.

Hedge fund users:

• AQR Capital Management

• Carlson Capital

• DKR Capital Partners

• HBK Investments

• Optima Fund Management

• SAC Capital Advisors

• Standard Pacific Capital

Asset managers:

• AEW Capital Management

• Brown Capital Management

• Fenimore Asset Management

• Freedom Capital Management

• Montag & Caldwell

• Navellier & Associates

• R.M. Davis

• Reich & Tang Asset Management

Competitors (products are bracketed)

• Eagle Investment Systems, West Hartford, CT

• Global Investment Systems (Mfact), Hackensack, NJ

• MultiFonds (MultiFonds Fund Accounting), Luxembourg

• Linedata Services (LongView Trading), Boston

• Beauchamp Financial Technology (FundManager), London

• Tradar (Tradar Portfolio), London

• DSTi, Surbiton, UK

• Sungard Investment Management Systems, London

• Simcorp (Dimension), Copenhagen

• In-house developed or proprietary applications

Geneva's core structure includes an object-based design, integration capabilities with external systems, and an in-memory architecture/database. Its object-based design means that all trades are entered into the system as objects. Each of these objects contains all of the information relevant to a trade, including variables such as security, price and quantity.

The application's in-memory architecture supports fast access and retrieval of information, characteristics which, according to the vendor, directly improve database and application performance. All portfolio information (accounting and performance data, etc) is generated 'on the fly' from persistent data (transactions data, reference data, pricing data etc), without the need for batch processing and storing. Geneva employs client/server architecture for Windows operating systems (XP/2000/NT) and/or Unix. The application is written primarily in a combination of C and C++.

Similarly, Advent Office employs client/server architecture for Windows (XP/2000/NT) with a MS structured query language(SQL) as the database management system (DBMS). Users can access the application directly or via a thin web-based client. Programming language is a combination of C, C++ and .Net.

Nick Tyler, chief operating officer of Adelphi Capital, a long/short equity hedge fund based in London: "The number of inputting errors has been reduced because errors that we generated due to human invention and the duplication of entries in the process have been eliminated. This has improved our efficiency. We needed a solution that was resilient, well known, and would demonstrate to clients that we're making a commitment to proper technology."

Mike Wyne, managing director of New York-based fixed-income asset manager Fischer Francis Trees & Watts: "Now that we have been in production for a while, we are even more sure we made the right decision to purchase Geneva. It is simply amazing what revolution this technology enables us to undertake. The amount of time and effort that we used to spend on corrections of errors on trades and everything resulting from it was seriously hampering our ability to develop the business. All this work has now been completely eliminated allowing us to concentrate on more value-adding activities."