20 – 26 JUNE 2013
The planning tracks with other survey results that indicate asset managers are concerned about highly correlated assets. While diversification is always an issue, Bob Hussey, executive vice president of the Institutional Services Group, said some of the concern was exacerbated by returns in 2008 that showed that asset considered to be diverse were still highly correlated. “Portfolios constructed in those traditional asset classes need to be supplemented with alternative investment strategies,” he said. There is more interest in alternatives for diversification because they will move differently from traditional, long-only equities, Hussey added. TECHNOLOGY
ring to take its time rather than rush. The goal is to have up to 50 capital markets specialists in the Frankfurt location within the next few years, Orbon said. That would give Sapient a total presence of over 300 employees in Germany when combined with the provider’s existing offices in Dusseldorf and Munich that focus on commodities, Orbon explained. Looking towards the future, Orbon said Sapient will focus on expanding its presence in Asia. The firm already has an office in Singapore but is starting to feel that an additional location will better serve clients, he explained. Sapient will likely eventually open an office in Hong Kong, though not for at least a few years, he added. TECHNOLOGY
WSL POLL
Nasdaq recently settled with the SEC for $10m over its flawed Facebook IPO, but is the prospect of such a large fine enough of a deterrent to move exchanges to take extra precautions in future?
Yes
16.67%
No
50%
Sapient looks to build up German biz
Sapient is looking to build up its presence in the German capital markets, according to Randall Orbon, senior vice president, who spoke in an interview. The service provider recently unveiled its new Frankfurt office and plans to focus on the predominantly German-speaking Austria and Switzerland from the location, Orbon said. Though not Sapient’s first office in Germany the office will start the firm’s capital markets practice in the region, Orbon shared. The Frankfurt office will lead an expansion focused on reporting solutions meeting CECAP, DoddFrank and EMIR standards, as well as advising firms on how to effectively consolidate their operations into one platform, Orbon said. “We’re making a commitment to Frankfurt… and the German capital markets,” Orbon said. The company has been planning to enter Germany for about the past 18 months, according to Orbon, prefer-
Tabb: Risk spending to rise, visualizations key
Sell-side risk spending is expected to rise relative to other technology spending in the financial sector, according to a report out this week from Tabb Group. In spite of budget slashing at financial firms, the sellside is expected to spend more on risk management, according to Paul Rowady, senior analyst, who spoke in an interview. Rowady is advocating for increased used of visualizations to be a component of tech spend. Rowady said the focus should now shift from infrastructure latency to reducing human latency. Likening trying to keep up with the flow of information to trying to drink from a fire hose, Rowady said: “It’s beyond human comprehension to view the data in more traditional methods such as a spreadsheet.” Information design is the future, according to Rowady, adding the focal point is creating intuitive, interactive and dynamic visualizations that update in real-time. These should
Maybe
33.33%
09
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start at a very high level and offer the ability to drill data to a level as granular as a regulatory filing or, in the case of unstructured data, an individual email, Rowady said. With more intuitive visualizations of risk across asset classes, individual instruments and through communications surveillance, firms can also start to more accurately discover risk stemming from nefarious activity that can be tipped off through communication or even discover alpha through mispriced risk, according to Rowady. Having the right tools is key, Rowady said, adding he feels that while various vendors are starting to provide these visualizations, the markets haven’t yet reached the tipping point. “Essentially this all about new forms of pattern recognition… we’re gradually developing the tools needed,” Rowady said.