“Someone will eventually use that information to reduce risk – either by redeeming a trader or putting on a call or a put position,” Aaron said. But Aaron added that he was not yet aware of any investors using overlays at present.
DPM was spun off nine years ago from Tricon, an $800 million proprietary trading firm partially owned by Commodities Corporation, itself acquired by Goldman Sachs in 1997. Originally charged to wind down Tricon’s assets in the early 1990s, DPM now provides trade processing, reconciliation, net asset value calculation and other services for hedge funds and investors. Working with risk technology vendors, DPM has provided investors and hedge fund clients with daily online value-at-risk figures.
Aaron expects hedge fund assets to double in the next three to four years, while he predicts DPM’s business will quadruple.