Blue Bay signs with SunGard

Blue Bay Asset Management, the London-based alternative investment firm established on July 3 last year, has licensed SunGard Trading and Risk Systems’ Panorama application for risk management and Decalog for decision support and compliance of its hedge and long-only funds.

As with a growing number of buy-side firms, Blue Bay opted to outsource the installation of its trading and risk IT infrastructure using a combination of SunGard’s project team and London-based financial services consultancy, MA Partners.

The project, which is relatively small – a headcount of 10 to 15 engineers headed up by MA Partners’ Matthew Estcourt – started in mid-February and is scheduled for completion after the launch of Blue Bay’s long-only fund in July.

“At the moment, the hedge fund is running in an outsourced back-office environment, but that will be migrated into the SunGard suite so that all the funds will be managed through the Decalog front-end using the Panorama risk engine beside it,” said Estcourt. He added that Panorama had been specially oriented towards credit derivatives and credit spread risk modules. "As far as credit trading is concerned it’s about as holistic an approach as you can get," said Estcourt.

Although Blue Bay outsourced the development of its IT infrastructure, it is not taking the application service provider (ASP) route, at least for the time being. "It just so happens that the most appropriate total solution we were after wasn’t available on an ASP basis. If it had been, we may well have decided to go the ASP route," Estcourt said.

Nick Williams, Blue Bay’s chief financial officer, said three factors drove the choice of SunGard – cost, functionality, and reduced implementation risk. He also cited SunGard’s size and its ability to guarantee long-term support and upgrades of its applications, though this was not a deciding factor.

"Although individually the SunGard applications may not be the best-of-breed," said Estcourt, "they were offered with a proprietary interface. There are multiple installations of Decalog and Panorama in the buy-side industry with the SunGard proprietary interface, so the idea was to limit the project risk by allowing them [SunGard] to take responsibility for that."

The launch of the firm’s second fund, a long-only fund, is expected in the next month. "It will be a Luxembourg Sicav -- an umbrella fund set up under the European Ucits legislation. There will be two sub-funds making up the Sicav – an emerging market debt fund and a European high-yield fund," said Williams.