OpenGamma Sets US Expansion

Derivatives analytics provider OpenGamma will expand its footprint to the US as regulations start squeezing asset managers.

OpenGamma—which will continue to be headquartered in London—foresees the US to be its biggest market. The move comes on the heels of recent regulatory action around margins that the company believes will increase margin costs by 70 percent for clients.

Peter Rippon, OpenGamma CEO, says the timing was right to take advantage of coming rules to expand the vendor’s reach.

“For any service provider, it is important to have a local presence,” Rippon says. “It is a bigger market for us with more funds and sophisticated regulations. But it also happens to be an obvious next step for us as the timing has been driven by regulations starting to make an impact.”

He says the new office opening will be a good opportunity for clients to get to know OpenGamma more and trust them with their sensitive data.

The New York office will be the first location outside of London for OpenGamma. Rippon says that while the primary focus will be growing its customer base in New York and possibly the West Coast, it will also serve as the base for working with firms in Canada and Mexico. OpenGamma already works with US clients but the expansion provides an opportunity to serve more of them. The vendor may open an office in Asia in the future.

Rippon says regulation has been a driving force for change in the industry and has created opportunities for third-party services providers like OpenGamma.

“Funds and asset managers have always used third-party providers but core analytics were usually built internally,” he says. “But some new rules have put pressure on costs so companies want to keep their quants focused on finding new trading strategies. The job of trading efficiently then falls to us.”

Rippon also points out uncertainty over Brexit’s impact raises issues of access to the largest clearinghouses for derivatives not just in Europe but also in the US.