April 12, 2023

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DataArt: Capital Markets – Case Studies

April 12, 2023

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Business Analysis

(both in New York and Russia)

Requirements Management (both in New York and Russia)

Development and QA

Post-Project Support

Sample projects

Front-office: cross-asset class trading, execution, allocation

BA expertise is present, but not as strong as in Middle-Office

Participate in and lead Requirements Management process for most of projects awarded to us

Implemented over 20 systems in the past 3 years

90% of systems developed by DataArt continue to be maintained and supported by us

• Cross-asset class OMS and Position Exporer for an ISV client (50,000 hrs effort)

• Algo execution system for an ISV (10,000 hrs effort)

• Trade Capture system for a Hedge Fund Administrator (10,000 hrs effort)

Middle-office: reference data management, risk management, operations

Very substantial experience in reference data management, ready to use BA team

More than 15 onsite specification sessions

Implemented over 30 systems

Software and operations support in maintenance of reference T&C and other market data

• Global Security Master for a Hedge Fund Administrator (5,000hrs effort)

• Price Master for an ISV• Risk Management System for

$2Bln Hedge• Stock loan management

system

Back-office: accounting and treasury, reconciliation, settlement

Expertise in integration with popular fund accounting systems, including Geneva, VPM, AdvisorWare

Both onsite and offshore

Strong experience in reconciliation process (trades, positions, cash, margins). Implemented data adapters for all major Prime brokers.

Post project support and reconciliation process assistance, custom accounting report writing

• Reconciliation tool for a Hedge Fund Administrator and a number of Funds

• Post-trade settlement process workflow

Elaborate on your experience in business analysis, user requirements analysis, design and development of such systems.

Moderate

Moderate

Strong Strong

Strong

Moderate

Very Strong

Exceptional

Very Strong

Very Strong

Very Strong

Very Strong

Primary Areas of Buy-Side Expertise

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Asset Management (including Alternative Asset Management)

Functional View

Client: Large Financial ISV (client reference available under NDA). Project: Investor Relationship Management System

Fund Accounting module in IRM / Fund Profiling solution•Advanced hierarchical structure of investor’s accounting information. Tracking balance and performance data at custodian, fund, subscription level.•Series accounting, profit allocations, roll-ups•Contributions, withdrawals, transfers•Liquidity analysis, what-if scenarios, stress testing•50+ standard reports•Integration With Third-Party Accounting Systems

— VPM— Advent Geneva— Advent Partners— SS&C AdvisorWare

Fund Accounting

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Clients: Multiple (both Hedge Funds directly and a product for an ISV)

Projects: Investor Relationship Management System (fund performance / investor reporting modules)

Fund Performance data:

Based on time series of NAV (returns) of fund (products) and benchmarks (market indices) we can provide analytical information for fund performance.

• Performance data - Historical and analytical data, Graphs with comparison of the fund data and more than 8 market indices, Classical statistical functions: Distribution, Alpha, Volatility, Correlation and Sharpe, Rolling by 12, 24, 36 months, Cumulative performance: quarter, 1 year, 3 years and 5 years comparison, Performance reports

• Fund performance management - Fund performance analysis against indices such as CSFB/Tremont, Dynamic reports with charting support, Market comparison, Historical data import and analysis

• Integration - Automatic Bloomberg data feeds for benchmark indices, External websites information retrieval, Corporate website integration, secure investor reporting

Benchmarking

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Individual Investor Performance

Analyzing investor transactions is possible to evaluate individual performance and provide comparison with the fund (product) or benchmark performance.

• Overall investor performance• Investor performance by products• Investor performance comparison with benchmark• Individual performance analytics

— Correlations

— Drawdown

— Growth of dollar

Benchmarking (continued)

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• Integration with major Market data Providers (both file-based and real-time)— IDC services:

– SIRS

– IDSI

– FTS (EXSHARE/EXBOND)— Reuters

– Reuters Market Data System

– Reuters Data Scope— Bloomberg

– B-Pipe

– B-Desktop ActiveX

– Bloomberg Data License (T&C bulk load)

• Integration with popular third-party products:— OMS/PMS: Macgregor, Charles River, Eze Castle, Alladin, Beauchamp, Tradar, Sophis— Accounding: VPM, Geneva, AdvisorWare— EMS: Inforeach, Portware— Analytical packages: Imagine, RiskMetrics, Barra, Yieldbook, Factset, FMC

Data Interfaces (multiple clients and projects)

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Integration with major prime brokers (data adapters for position, trades and cash reconciliation)

•Bear Sterns (BEST)

•Morgan Stanley (MSCO)

•Morgan Stanley SWAP (MSCOOTC)

•Goldman, Sachs & Co. (GSCO)

•Lehman (LEHM)

•Lehman Futures (LEHMF)

•Citibank (CITI)

•UBS

•Deutsche Bank (DMG)

Data Interfaces (continued)

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• Familiar with FIX versions 4.0 through 5.0; FIXML, ISO 20022 • We have worked/integrated with several popular FIX implementations, including Javelyn

(NYFIX), B2Bits FixAntenna/FixEdge, FixFlyer for various applications. • Member of our Advisory Board sits on FIX Technical Committee • Implemented FIX monitoring/performance management tools

FIX Protocol

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Technology Client Case Study: Front-to-Back Office Enterprise Solution for Hedge Funds (client name disguised)

Working under leadership of US-based business domain experts Technology and architecture decisions are done within DataArt's team and approved by the client System-based engineering team organization with universal functions shared across teams (QA, tech writing, service) "Agile" process

Project description

Developed complete front-to-back office enterprise solution for hedge funds, including cross-asset class order management, Global Security Master, portfolio analytics, pricing and reporting (excluding only accounting) The solution is available to hedge funds and fund administrators as a hosted platform or an in-house installation. Solution is adapted by one of the leading prime brokers as their base offering to hedge fund clients; other clients include over 10 fund administrators and many multi-billion hedge funds. This technology is developed entirely offshore with relatively little US-based leadership. While many technology vendors use offshore resources for parts of their project volume, this is a unique story as fast-growing, well-funded ISV relied completely on offshore vendor for end-to-end IT operations.

Technology Microsoft platform (.NET, SQL Server 2005), Citrix

Timelines 1.5 years

Client benefits

40% savings compared with local cost (if client were to build its own team) Time saved by engaging an readily available team vs hiring own team – 9-12 months

Teamconfiguration

30 people, 60% engineering, 20% QA, 20% technical support

Project management

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Developed a new generation Investor Relationship Management system for hedge funds and a fund profiling system for fund of funds. Replaced legacy system. System deployed at over 200 asset managers with total of more than $250 billion Assets Under Management. Product is a true enterprise class system with advanced functionality unquestionable leader among other competing products.

2 years

Team of 15 engineers based offsite, periodic onsite milestone delivery, implementation and integration Working as an extension to the client’s R&D team

30% savings compare to onsite costs Client did not have inhouse resources to do the work necessary Over 1 year time saving if client were to hire people to do the work internally

Microsoft .Net platform

Project description

Technology

Timelines

Client benefits

Teamconfiguration

Project management

Multiple priorities had to be managed simultaneously: re-engineering legacy product, supporting existing customers and adding new functionality

Technology Client Case Study:Fund Runner (SS&C)

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Key features: Fast and reliable communication with electronic brokers Supports of electronic orders to perform ticket execution Easy integration with third-party solutions for electronic

connectivity Flexible support of different versions of FIX Supports common scenarios

Standard Electronic Order Routing Staging Order Destination Third-Party Algorithmic Routing Unsolicited Trade Reports

Case Study: Electronic Trading System with FIX connectivity

FIX connectivity could be linked directly with various Sell-Side venues, including: Direct Market Access (DMA) systems Execution Management Systems (EMS) Alternative Trading Systems (ATS)

Architecture: The Electronic Trading is performed through

Order Management Gateway (OMG) that is connected to a FIX Engine. The FIX Engine manages all physical FIX connections to various destinations. In terms of electronic order routing, OMG works with any standard FIX Engine (running separately from OMG).

Currently, the system supports Appia FIX Engine from NYFIX.

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Complex trading workflow Real-time collaboration Portfolio analysis Integration with legacy and external systems Quick response to user requests Modular design, shared components

Highlights:Event manager

service

Real-time eventsE-mail notification

service

E-mails

Trade serviceReal-time price

service

Legacysystems

Back-office clients

Bloomberg

Reuters

prices

Quant analysisservice

Front-end clients

Quants & alarms

Third-partysystems

Global securitydatabase

Security postingservice

Reutersdata feeds

T&C changeevents

Third-partysystems

instruments

trades

trades

Case Study: Trade Order Management System

Integrated Trade Order Management System

Client: New York-based Hedge Fund

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Global Enterprise Market Data Repository

Multi-source architecture Automated pricing rules Advanced UI Data transformation Audit HTTP Crawler for OTC securities Exchange adapter for Prime broker market

data Integration with leading market data providers:

Bloomberg, Reuters

Highlights:

Case Study: Multi-source pricing application (Price Master)Client: New York-based Hedge Fund

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Case Study: ETL and Pricing Data Warehouse

Price Master: a global enterprise market data repository which plays a key role in STP data flow of a financial organization. Its primary task is to collect instrument prices and other market data from various data sources, parse it and using pricing rules provide a final set of information for downstream systems.

Client: Multi-Strategy Hedge Fund with $2+bln AUM

BUSINESS BENEFITS:

Single-entry point for all market related data Supports various types of securities and various types of market

data Pricing rules provide stable and flexible system for portfolio

pricing Advanced audit and change tracking features

Market Data gathering

Reuters Data

source

Web crawler

Email parcing

Positions update

Portfolio manage

ment software

Automated PricingPricing rules

Posting to downstream

systems

Order manage

ment

Risk Manage

ment

HIGHLIGHTS

Advanced Data mapping Extraction rules BizTalk as a integrating and mapping

software Dynamic Data structure system - XML

base schemas support

Client: New York-based Hedge Fund

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Case Study: ETL and Pricing Data Warehouse .Net C# .Net Remoting Web services MS SQL 2000 BizTalk Server 2004 Infragistics Enterprise suite

Client: New York-based Hedge Fund

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Case Study: ETL and Pricing Data Warehouse Various data sources System prioritization and pricing

rules Support for multiple types of

securities Flexible architecture provides

ability to easily add new types of source data

Unified data management and conflict resolution systems

Highly customizable UI

Client: New York-based Hedge Fund