SunGard buys Derivatech

The purchase, for an undisclosed sum, was completed in the last two weeks to build the Front Arena platform’s foreign exchange options trading and risk management capabilities, Stephen Butcher, chief operating officer at Front in London told RiskNews' sister publication FX Week.

Front Arena is a multi-asset class platform that is strong in fixed income and interest rate derivatives but lacks coverage for complex exotic options, he added. Its forex options coverage focused on high-volume vanilla and exotic options, while Derivatech’s dt Compass can handle more technical exotic structures.

"This purchase will help us to provide a leading-edge cross-asset class cash and derivatives trading platform," said Butcher.

A small number of Derivatech staff were made redundant where replication of positions occurred, but senior management has been maintained, Butcher said. Chief executive and co-founder Nick Hatzopoulos will continue to manage Derivatech business, reporting to Butcher, while software development manager and co-founder John Hatzigiannis will report to Mats Lillienberg, chief technology officer, in Stockholm.

But chief operating officer Paul Tennola will not move to Front Capital, although he is expected to take another role within SunGard. The remaining 22 staff in New York and London have already moved into Front’s offices.

Butcher said Front would continue to support dt Compass as a standalone product for banks that require coverage of foreign exchange options. Compass will also be integrated into Front Arena.