Paladyne and SunGard Form Accounting Partnership
February 11, 2008
Paladyne Systems, a New York-based provider of technology to hedge funds, is offering SunGard Data Systems' portfolio management software as part of its suite of hosted front- to back-office applications, the companies announced last week.
Wayne, Pa.-based SunGard and Paladyne will deliver Visual Portfolio Manager (VPM), designed specifically for hedge fund managers, on an application service provider (ASP) basis. Though it is primarily aimed at start-ups and small-to-medium-sized hedge funds, the companies say that funds of any size and complexity will be able to license the solution.
"It's a unique type of relationship that gives SunGard the ability to offer this hosted solution of their product and leverage Paladyne infrastructure," said Sameer Shalaby, CEO of Paladyne.
Shalaby noted that the partnership will not affect the existing hosting relationship the company has with San Francisco-based Advent Software. In 2005, Paladyne agreed to offer Advent's Geneva software for investment account and portfolio management. "Although we've been working successfully with Advent on the Geneva product, we've seen a lot of interest in" VPM, he said. "We've had a number of clients that were asking for it, so we reached out to SunGard."
Paladyne has similar relationships with multiple data vendors that compete with one another, Shalaby explained. In December it added Markit Group's credit derivatives pricing and reference entity data information to its hosted suite. It also has deals with Reuters, Interactive Data Corp., Standard & Poor's and Thomson Financial for equities, foreign exchange and fixed-income data, and securities identification.
"In response to market demands, we are expanding our offering to be accounting systems-agnostic," he added. "Based on clients' needs and preferences, we will offer the appropriate accounting solution." Advent officials could not be reached for comment.
VPM is used by more than 45 hedge funds, according to SunGard. The companies say that the ASP service will appeal to hedge funds that require comprehensive infrastructure, especially those that are leveraging a single prime broker's technology and are considering adding a second. Customers will be able to access the full functionality of VPM through Paladyne and will receive IT, disaster recovery and data services.
Bill Elbery, VP of sales for SunGard's VPM, which the company acquired in a November 2006 deal for Integrated Business Systems (IBSI), a Melville, N.Y.-based hedge fund software vendor, said the partnership gives smaller funds "the opportunity to gain the functionality of a system like VPM through a hosting provider."
For SunGard, "starting conversations with firms like Paladyne that wanted to offer [VPM] as a hosted solution made sense in order to add further growth in the small- to medium-sized hedge fund space," said Elbery.
He added, "From Paladyne's perspective, their firm has the ability to offer either product--Advent or SunGard--so the customer gets to choose. The end result of this is more choice for the end customer."
Isabel Schauerte, analyst with the securities and investments group at Boston-based Celent, said the partnership is "a smart strategic move for both SunGard and Paladyne." The benefits for Paladyne include access to SunGard's extensive customer base--the company boasts approximately 25,000 clients in 50 countries, including about 50 of the largest financial institutions, she said.
"As far as SunGard is concerned, Paladyne is a very strong strategic partner," said Shauerte. "The Paladyne model has broad market appeal and acceptance, as the ASP model generally is gaining popularity in the hedge fund sector, particularly among newer hedge funds. After adding to the toolbox by acquiring IBSI and its VPM product, SunGard now seeks to increase interest in the product across a wide potential user base."
