London-based derivatives analytics company, OpenGamma announced Nov 28 its official expansion into North America. With growth rates year-on-year of 300%, now is the ideal time for a U.S push, the firm says.
OpenGamma’s expansion plans come as regulatory and macroeconomic pressures continue to hit hedge funds and asset managers with offices all over the world. Specific rules on clearing houses means that hedge fund managers can now be charged additional margin known as ‘liquidity add-on’ which can increase the cost of margin by 70%. This increase is inadvertently hitting end investor returns as hedge funds continue to lock down more and more capital.
Market participants in the US are also facing pressures from the uncertainty surrounding where Euro swaps will clear post-Brexit. Recent noises from the CFTC that European banks may be blocked from accessing U.S futures markets could lead to further fragmentation in the market and a hike in trading costs, which would impact investor returns.
Commenting on the growth plans, Peter Rippon said: “Our expansion is the next logical step to addressing the current pressures U.S derivatives markets face. As the cost of trading derivatives globally continues to increase, so too has the adoption of analytics to reduce the cost of capital and protect investor returns. Now, more than ever, understanding and managing margin rather than leaving huge sums of money on the table, is essential for any global macro hedge fund.”