Reech joins the ASP rush to target hedge funds

Called RiskHedge, the product offers reporting flexibility and customisation of risk management tools for all asset classes and trade structures.

Hedge funds, which are unregulated funds, often cannot afford to develop sophisticated risk systems like major investment banks. They are viewed as a key growth market for ASP providers due to the pressure they face from investors and regulators to improve transparency.

Investors often refuse to place funds with alternative investment vehicles unless they have a clear indication of the inherent risks. Regulators, meanwhile, are more likely to impose rules on hedge funds unless they demonstrate they do not present a risk to the financial system. “This places a demand on hedge funds to demonstrate risk management techniques and risk-based returns via flexible reporting,” said Reech chairman and chief executive Christophe Reech.

Like other providers, Reech will also target large prime brokers like Deutsche, Merrill Lynch, Bear Stearns, UBS, JP Morgan, which increasingly want to white-label, or co-brand, risk management and financial analytics tools to their own hedge fund clients. Such deals are typically very lucrative to ASPs.

Reech said pricing would be based on a pay-per-use basis, but provided no further details.