Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
The survey found that of 100 participants, 69% said their trading and risk management requirements had changed as a result of the market volatility. A total of 63% said their firms had increased spending on trading and risk management technology during the past 12 months, and 57% said they expected to increase spending over the coming 12 months.
Respondents said the ability to monetise collateral is now much harder, and that risk systems need to be updated in order to cope with the increase in trading volumes.
In Asia, where there has always been significant growth potential for technology vendors, a number of market-specific events are also driving demand.
ôThe local banks in Korea are getting ready for the capital markets consolidation act and this is generating demand for risk management and portfolio management systems,ö says Stephen Knipe, senior project manager for Sophis Asia-Pacific. ôAnd that's why the package vendors in Korea have won a lot of business this year.ö
ôThe China market has not opened up yet but many vendors are making preparatory moves ahead of this happening,ö he adds.
Knipe says in other markets, like Hong Kong, Singapore and Tokyo, it is a case of business as usual. ôSome of the global organisations may have seen some impact from the credit crisis but itÆs not been noticed on the ground by vendors,ö he adds.
Sophis provides cross-asset, front-to-back portfolio and risk management technology for the capital markets, asset management and insurance industry. Global clients include investment banks, asset managers and hedge funds.
Regulators keep their eyes open on tightening insurance industry by introducing more detailed risk management requirements, which could bring pressure on smaller players.
China and India are more obvious choices for AustralianSuper to consider in Asia Pacific, but the super fund currently lacks the expertise and prefers to stick to the US and Europe.
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