Aite Group estimates the market for buy-side analytics to increase by approximately 80% to US$3.2 billion in the next five years.
A new report from Aite Group, LLC profiles five vendors of multi-asset class risk analytics solutions, and compares their functionalities as they relate to risk measurement methodologies. While there are multiple types of risk that can affect an enterprise, this report focuses primarily on products geared toward market risk, as well as credit and regulatory risk where applicable. The report looks at both Value-at-Risk (VaR) and factor model techniques.
Possessing risk analytics does not necessarily ensure protection from all losses due to market-driven events. The ability to view the many different aspects of market risk will, however, give risk managers a basis on which to make investment, hedging, rebalancing and business decisions that they believe will best protect their assets. As such, the marketplace for buy-side risk analytics is expected to grow and develop in a number of different ways, even after the 2008 market swoon. While the market for these tools is expected to grow significantly, it will be tempered by the reality of declining asset values and eroding investor confidence. As such, Aite Group expects the buy-side analytics market to increase by approximately 80% to US$3.2 billion over the next five years.
"In the current financial market environment, the need for comprehensive risk measurement and risk management tools is evident," says John Jay, senior analyst with Aite Group and author of this report. "Buy-side firms, especially those that manage multiple asset classes and security types, need to be able to view market risk from a number of ex-ante vantage points. Nevertheless, the current economic scenario will impact the adoption of buy-side risk analytics, and growth will be relatively modest over the next several years. Those vendors offering cost-effective pricing, risk measurement techniques that address current market needs, and a wide spectrum of asset coverage will certainly fare the best."
This 39-page Impact Report contains 12 figures and nine tables. It profiles the following offerings: Algorthimics’ Algo Risk, Blackrock Solutions’ Green Package, MSCI Barra’s BarraOne, RiskMetrics’ RiskManager and SunGard’s APT.
Clients of Aite Group’s Institutional Securities & Investments service can download the report by clicking on the icon to the right.
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