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Front Capital wins $5 billion hedge fund client

KBC Alternative Investment Management (KBC AIM), a hedge fund subsidiary of Belgium's KBC Bank and Insurance Group that manages more than $5 billion in assets, plans to implement Front Capital's Arena trading, risk management and distribution system.

KBC AIM will integrate the Front system with its own proprietary trading models to manage its options arbitrage and capital structure arbitrage funds, as well as support its cross-asset strategies.

Officials at the fund said Front Arena’s scalability and extensibility won them over. They expect the system to provide a single platform for pricing, position-keeping and risk management. KBC AIM plans to go live with the system in the second quarter of 2005.

Stephen Butcher, chief operating officer at Front, a unit of SunGard, said interest from hedge funds using more sophisticated trading strategies has risen in the past six months. "We don’t sell into the buy side for anyone who’s long-only or a more traditional fund manager because that’s not part of our target market," he said. "For hedge funds like KBC, which is also a bank, where you have people shorting products, the product is entirely applicable."

Five hedge funds are either live or planning to implement Front Arena, Butcher added.

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