Order in the house - BST’s software feature scrutinising nine buy-side order management systems

Order management systems (OMS) have historically been one of the most common technologies found on the buy side, either developed in-house by buy-side firms themselves (with the luxury of large IT staff numbers, technical knowledge, and budgets), or more frequently, acquired from third-party vendors of which there are about a dozen in this space.

That is not to say, however, that all buy-side organisations have their own OMS – most do but not all, especially those buy-side firms who still manage to get by from day-to-day by underpinning their business with a blend of spreadsheets, phones and faxes; however, these days it is difficult to fathom how buy-side firms can operate without a functionally rich and robust technology infrastructure – especially as trade volumes continue to increase while individual trade values/ticket sizes continue their downward spiral – and yet they do, although the numbers of these types of organisations are on the wane.

The benefits offered by OMSs are significant. They provide user firms with an integrated platform that at the very least offers automated order management (naturally), multi-asset class support, portfolio modelling, some level of pre- and post-trade compliance, a number of reporting features, and FIX connectivity – invariably version 2.2. Other features that most buy-side OMSs possess (but not all) include: execution management system (EMS) functionality, transaction cost analysis (TCA), access to broker-developed trading algorithms, and real-time P&L.

Integrated EMS functions are clearly in demand from buy-side end users, as all but one OMS provider in this feature (Linedata Services) indicate that they either plan to offer access to an EMS through their OMS, or they already do by way of having developed an EMS 'in-house' as is the case with LatentZero. Other vendors, like SunGard for example and its EMS provider TradingScreen, have resorted to alliances.

Demand for TCA tools is also set to increase as investment managers on both sides of the Atlantic are coming under renewed pressure to provide transparency into the costs incurred by executing and settling trades on behalf of their institutional investors.

This month's OMS feature, like the EMS and risk management features of January and February respectively, provides an overview of the OMSs of nine technology vendors serving the buy side. This is not a product evaluation or a shoot-out to establish a pecking order but rather a general description of the companies and their products operating in this space.

Vendors are listed in no particular order.

Charles River Development provides technology systems and services to investment professionals in the institutional, mutual fund, banking, hedge fund, wealth management, insurance, and pension fund industries. The firm was founded in 1984, is privately held and is headquartered in Burlington, MA, outside Boston. Charles River currently has approximately 400 employees and offices in London, Melbourne, Paris, Singapore, and service partners in Brazil, Chile, Japan, Mexico and South Africa.

Charles River Investment Management System (Charles River IMS) is a front- and middle-office suite designed to support all security types and includes the following functions:

• Managers exercising more direct control of their trading operations will have to more actively prove Reg NMS compliance than managers relying more on their counterparties

• Reg NMS pushes the issue of best execution further on the buy side, but managers will still have to maintain their own internal processes for defining and measuring that concept

• Portfolio and order management - Electronic trading and real-time FIX trading - Real-time pre-trade, post-execution and end-of-day compliance - Centralised trade matching, confirmation and settlement workflow management

Charles River IMS was introduced in 1995 and currently has approximately 240 buy-side clients in 30 countries, including portfolio managers, dealers and traders, and compliance personnel. Charles River IMS provides clients with complete trade cycle support for multiple asset classes including derivatives. It is designed to be scalable and integrate with other systems.

Charles River IMS features an N-Tier service-oriented (SOA) architecture that supports continuous 24/7 operations and incorporates industry standard technologies (Microsoft.NET front-end using C#; Java middle tier; real-time XML messaging and Web Services over SOAP) to improve performance and streamline trade execution and processing. It incorporates real-time electronic trading via FIX through the Charles River Network, a private financial network based on the BT Radianz global financial extranet.

Charles River IMS is an enterprise institutional asset management system offering broad asset class coverage on a single platform (FX, derivatives, fixed income, equities etc.). It has 240 clients globally, significant annual R&D investment, and is based on a scalable, multi-tier service-oriented architecture. Charles River also offers 24x7 service and 180 support and implementation personnel.

Founded: 1984

Based: Burlington, MA

OMS: Charles River OMS

Launched: 1995

Client numbers: 240

BNY ConvergEx Group's Eze Castle Software (ECS) subsidiary provides real-time, multi-asset class investment technology to over 300 investment managers. ECS was founded in 1995 and merged with BNY Securities Group in 2006 to form BNY ConvergEx Group. ECS has locations in Boston, New York, London, San Francisco, and Stamford, CT. ECS currently has 230 employees (700 ConvergEx-wide) and provides technology supporting its global multi-asset class OMS, compliance, electronic trading, portfolio modelling and analytics, commission management, and third-party settlement transfers.

The ECS OMS is a multi-asset, multi-currency system that supports intuitive trading workflows specific to the asset class being traded. The components of the platform enable users to monitor and analyse portfolios, trade electronically, monitor multi-currency cash balances, run compliance checks, manage commission budgets, and integrate directly with internal systems and external third parties in real time. Traders Console OMS is aimed at hedge funds, mutual funds, pension plans, and institutional money managers.

ECS's products incorporate a scalable SOA architecture. ECS supports trading for global equities, derivatives, fixed income, and FX. It also provides access to liquidity through over 330 destinations including sell-side brokers, ECNs (Electronic Communication Networks) and crossing networks, and provides users with DMA (Direct Market Access) and access to EMSs. The platform currently interfaces with over 100 third parties; ECS also provides an API for additional real-time integration.

• Electronic trading that supports multiple workflows and offers connectivity to over 330 destinations including brokers, ECNs, EMSs, crossing networks, DMA, and trading Algorithms - Intuitive workflows for trading multiple asset classes including equities, fixed income, CDS, swaps, options and futures - Real-time P&L system that enables users to view performance at the security, group, account, sector, asset class, or strategy level - Real-time pre- and post-trade compliance monitoring

Founded: 1995

Based: Boston

OMS: Traders Console OMS

Launched: 1995

Client numbers: Approximately 300

Founded in 1983, Advent provides investment management products and services to the global buy- and sell-side communities. The firm currently has a total number of 4,500 client firms in 60 countries with assets under management/administration of nearly $14 trillion. Founder, president and chief executive Stephanie DiMarco leads the company, which has more than 800 employees around the world, including offices in San Francisco (HQ), New York, Boston, London and Dubai. Advent's product portfolio includes: Moxy, Geneva, Advent Portfolio Exchange, Axys, Partner, Advent Custodial Data, Advent Corporate Actions and Advent Back Office Service. In 2006 the company reported full-year revenues of $184.1 million.

Moxy was originally developed 11 years ago and today has approximately 750 clients worldwide, making it unquestionably the most successful OMS in the financial services industry, and arguably one of the most ubiquitous applications of any kind. Moxy's clients range from small hedge funds to large asset managers.

Advent offers a number of other buy-side focused applications – Geneva, APX and Axys – designed to integrate with Moxy and provide buy-side firms with a 'single vendor' approach to addressing their trading and portfolio management needs. Moxy is an open OMS allowing users to connect to the broker/venue/tool of their choice.

Moxy is built on Microsoft technology and can be deployed as an ASP using Citrix. Trading counterparty connectivity is achieved by Moxy's embedded FIX engine. Advent describes the technology underpinning/comprising Moxy as "completely agnostic", allowing buy-side firms to connect to the broker/venue/tool of their choice.

Advent offers integration to its best-of-breed portfolio management platforms allowing buy-side firms to implement an entire front-to back-office investment management environment from one vendor. It also offers an open OMS allowing clients to connect to the broker/venue/tool of their choice.

Founded: 1983

Based: San Francisco

OMS: Moxy

Launched: 1996

Client numbers: 750

Indata is a privately held, San Diego-based provider of buy-side technology, focussing on trade order management, compliance and portfolio accounting. The company was founded in 1968 and has three principle offices: Greenwich, CT; New York; and San Diego. Indata's flagship offering is the IMS Product Suite consisting of Precision Trading (OMS), IMS Back Office (accounting) and InContact (CRM). The company's IMS (Investment Management System) suite provides an integrated platform based on Microsoft SQL Server 2005, supporting: portfolio modelling, pre- and post-trade compliance, trade order management, portfolio accounting and reporting, performance measurement and attribution, composite maintenance, billing, and web-enabled CRM. Indata also provides disaster recovery and system administration services. The company's other suite, Indata Online, is an internet-based attribution and performance reporting ASP.

Indata Precision Trading (IPT), launched in 1993, is aimed at buy-side managers using a blend of asset classes and account types (institutional, high net-worth, hedge funds). Its strengths include its technology platform, open architecture and customisation capabilities, functionality for accommodating different work flows, and multi-asset class support.

IPT can be deployed in-house or run as an ASP. Delivery includes connectivity to multiple platforms, broker neutrality, and support for multiple assets classes. It is customisable by virtue of its industry standard database platform – SQL Server 2005.

IPT provides depth of functionality in compliance and modelling. It is a broker-neutral platform with connectivity to a number of broker platforms and third-party tools. It offers users the ability to integrate analytics and to customise the application based on their needs.

Founded: 1968

Based: San Diego

OMS: IMS for Windows

Launched: 1993

Client numbers: 150 across product lines

LatentZero, established in January 1999 by founders Richard Jones (chief executive) and Dan Watkins, is a specialist provider of front-office systems to the buy side. LatentZero's flagship suite, Capstone, comprises three cross-asset components: - Tesseract, for portfolio analysis - Minerva for order management and trading - Sentinel for compliance. Each can be deployed separately or as a fully-integrated front-office system. Additional modules include Derivatives, an overlay providing integrated securities and OTC derivatives management, and Minerva EMS, which adds integral execution management capability (see Product Profile page 44, BST January 2007). LatentZero is privately owned and headquartered in London and Boston and has more than 85 customers, including nine of the world's top ten asset managers, and a range of smaller institutions and hedge funds around the world.

Capstone Minerva order management and trading system was launched in 2002, and has over 50 clients worldwide, who use the product for equities, fixed income, money markets, derivatives and currency trading. Minerva is targeted solely at the buy side, from large multi-site institutions through to hedge funds. LatentZero launched Minerva EMS last month, which adds integral algorithmic trading, broker-neutral, DMA and TCA. The Derivatives overlay module provides integrated position management, pricing, trading and lifecycle management of OTC derivatives.

Minerva is built using LatentZero's service oriented, event-driven architecture which provides real-time notification of events and market data. Application servers run on Windows, Unix and Linux, and Oracle and SQL Server databases are supported. API toolkits enable integration with any other system and Minerva includes pre-built gateways to all major liquidity destinations and to a number of back-office systems. Real-time market data is integrated from providers, such as Bloomberg and Reuters.

LatentZero claims that Capstone Minerva achieves transaction throughput levels exceeding those of other OMSs. Minerva can be deployed on a global basis from a single, central installation, making the product popular with multi-site managers. Configurable trade-screens and workflows provide support for a range of asset classes, investment styles and trading desk configurations. The firm has invested significantly in the platform's multi-asset support, of which OTC derivatives is a strength. The new EMS module makes Minerva currently the only buy-side OMS with full integral EMS capability (other OMSs offer EMS functionality but only via alliances with specialist EMS vendors).

Founded: 1999

Based: London and Boston

OMS: Capstone Minerva

Launched: 2002

Client numbers: 50

Investment Technology Group is a specialised agency brokerage and technology firm. Established in 1987, ITG has over 1000 employees, is headquartered in New York and has offices in North America, Europe and the Asia Pacific region. In September 2006, Robert Gasser was appointed chief executive and president and Alasdair Haynes is head of the firm's international operations. Revenues for ITG in 2006 were $600m.

ITG's OMS, XIP, was launched in 2004 and has over 170 clients globally. It is a broker neutral, multi-asset system that provides a number of features across the trading continuum including portfolio modelling/rebalancing, pre-trade analytics, compliance, and post-trade applications. ITG's OMS has broad buy- to sell-side connectivity supporting trading and post-trade processing, as well as access to EMS, DMA, programme and algorithm trading functions.

XIP is provided on Intel and Unix platforms running a SQL Server or Sybase RDBMS (Relational Database Management System), written in both C++ and .Net. A number of components including the routing/trading and post-trade processing networks are provided as a fully managed ASP. XIP also offers a 'software development toolkit' for customisation and integration to third-party and in-house systems. XIP provides multi-asset class decision support and trading with FIX access to 350+ broker connections, crossing networks and ECNs.

ITG's OMS covers the entire trading continuum providing the information and tools necessary for portfolio managers, traders, compliance managers, operations staff and others, to make and execute real-time decisions. This, according to ITG, is key as these decisions have an impact on the performance of all trades as they are processed through the continuum, and therefore their contribution to capturing alpha.

Founded: 1987

Based: New York

OMS: XIP

Launched: 2004

Client numbers: 170

Launched in 1990, SunGard Decalog provides a suite of Service Oriented Architecture components designed for buy-side portfolio management, trading, and compliance. Decalog has been part of the SunGard group since 1999 and has a global presence due to the firm's offices in the US (Boston), Europe (France, Germany, Luxembourg and Italy) and South-Africa. The business unit is headed up by president, Thorsten Heissel, and has approximately 120 full-time employees. In April 2005 SunGard's was acquired by a consortium led by Silver Lake partners, a Menlo Park, California-based private equity firm, for a record $11.3 billion. SunGard has annual revenues of $4 billion.

Decalog Trader provides buy-side users with trade order management functionality including portfolio modelling, portfolio rebalancing and asset allocation, order generation, and trading, to achieve best execution. It also provides multi-asset market connectivity and supports post-trade execution processes. Decalog Trader is FIX- and web services-enabled and offers users OMS and EMS functionality via a partnership with the TradingScreen EMS. The platform also provides DMA to ATSs and ECNs, and connectivity to: - TradeWeb and Market Axess - Broker-sponsored algorithmic trading tools -Post-execution services (Omgeo CTM, Oasys). It also provides users with an orders trading blotter, basket/program trading functions, and a data-model to support TCA data requirements for TCA providers (development is in progress for integration/reporting with TCA tools such as ITG TCA). It also benefits from the SunGard Common Service Architecture

Decalog was built using Java in a J2EE-based application server environment and is an N-Tier client-server architecture with database, application server, and client interface layers. Decalog can run on Windows XP/2000, Unix, and supports Oracle and Sybase databases. Decalog has a centralised data warehouse with a data model which spans all asset types and enables detailed queries and analysis. Decalog supports both hosted (IMpower ASP solution) and on-site installations.

• Combined offering with EMS (TradingScreen EMS) functionality - Direct FIX connections to brokers' algorithmic trading strategies using XML-based integration layer • Data-model to support TCA. - Is available as a stand-alone service for orders processing and routing. This SOA component can be plugged into any order generation application.

Founded: 1983

Based: Wayne, Pennsylvania

OMS: Decalog Trader

Launched: Initially launched in 1990s; redesigned in 2005

Client numbers: 50

Linedata Services was founded in 1986 and has been listed on the Paris stock exchange since May 2000. In 2006, Linedata achieved revenues of €148.4 million. The firm is headquartered in Paris, and has additional offices in Hong Kong, London, Edinburgh, Dublin, Luxembourg, New York, Boston, Chicago, Hackensack (NJ), and Riga (Latvia), with a total headcount of 860. The firm's products address the specific requirements of mutual and institutional funds, alternative and hedge funds, fund administrators, prime brokers and private wealth companies.

LongView Trading is designed to support the business requirements and workflows of portfolio managers, traders, and compliance officers. The OMS offers portfolio modelling, order generation, electronic trading and compliance functionality, including: - Broad asset coverage and multi-currency support - Account and account group rebalancing using pre-defined models and targets - Analytics to evaluate 'what-if' trade scenarios - Customisable user interface - Electronic trading using FIX - Pre-trade, pre-allocation, and post-trade compliance monitoring and testing.

LongView Trading is based on a real-time N-Tier message-based architecture, which allows the system the scalability to support large numbers of users across multiple locations. LongView Trading can be deployed either as an on-site system or as an ASP. Linedata's Liquidity Alliance Program provides access to liquidity pools across all asset types, delivering multiple trading and liquidity destinations to the user's desktops.

Linedata claims that View Trading is one of the fastest and most scaleable OMSs servicing large global clients, rebalancing thousands of accounts, as well as enabling fast, efficient electronic trading. LongView Trading's flexible desktop configurability, and array of liquidity partners, make it a strong player in the market.

Founded: 1986

Based: Paris

OMS: LongView Trading

Launched: 1995

Client numbers: 100

Thomson Financial, headquartered in New York, is a subsidiary of The Thomson Corporation, a provider of electronic workflow solutions to law, tax, accounting, financial services, scientific research and healthcare industries. Thomson Financial, with 2006 revenues of $2 billion and a total headcount of 9,300, is a provider of information and technology services to the financial services industry. The firm is headed up by Sharon Rowlands, president and chief executive; while Suresh Kavan is president of corporate services, investment management, and investment banking; and James Toffey is president, equities, fixed income and wealth management.

Thomson TradeCentral is an integrated front-office trade order management ststem, supported and administered by Thomson TradeWeb, Thomson Financial's online marketplace for fixed-income securities and derivatives. TradeCentral offers portfolio modelling, order generation, electronic trading, compliance functionality and a proprietary link into TradeWeb data, analytics and execution. TradeCentral has signed two clients since launch in Q4 2006.

TradeCentral has a real-time N-Tier, message-based architecture that consists of a smart client, application servers, a message bus, and a Microsoft SQL server or Sybase database. This architecture allows TradeCentral to support large numbers of users across multiple locations on an install or ASP basis. TradeCentral's open relational database technology supports 24x7 global trading and STP by providing integration with accounting systems, settlement systems, data vendors, and other third-party applications. Connections to liquidity are supported by a FIX 4.2/4.4-compliant gateway to any certified trade-routing network.

Thomson Financial lists TradeCentral's liquidity sources (Algorithmic, DMA, ECN, FX and fixed income) and the platform's integration into TradeWeb as the qualities that differentiate it from other OMSs. TradeCentral clients can look into TradeWeb for available inventory and analytics directly from reports and route single or multiple orders to TradeWeb for execution without leaving the application or bypassing compliance.

Founded: Early 1980s

Based: New York

OMS: Thomson TradeCentral

Launched: Q4 2006

Client numbers: 2