SuperDerivatives (SD), the derivatives benchmark and multi-asset front office solution, has been chosen by Simpson Spence and Young (SSY) shipbrokers to enhance the alpha returns of its new proprietary hedge fund, The Bluewave Shipping Fund.
SSY will use SD’s independent and market-accurate derivatives pricing, analytics and portfolio management tools to manage risk and maximise returns of Bluewave’s shipping derivatives operations.
SSY is the world’s largest independent shipbroker and specialises in the freight market. The company set up Bluewave to generate absolute returns from the freight market, a venue characterised by high volatility and at times limited liquidity, and will use its extensive experience and wide freight knowledge to drive the fund.
Bluewave needed to be able to manipulate data received from market sources in order to generate indicative pricing and perform stress testing, while retaining the ability to quickly and easily track its books against the Baltic Exchange, which publishes settlement prices every day.
The fund also had to ensure it had an efficient and transparent portfolio management system to demonstrate to external parties sound operational and financial risk control in a very opaque and volatile market.
Mark Richardson, ceo of Bluewave, explains: “We had a short time to produce a strong and scalable hedge fund model that would appeal to investors, but as brokers did not have many of the in-house IT structures that a fund manager would take for granted. SD’s consultative approach and SaaS model meant that they quickly identified our requirements and got us up and running in no time.
“Having surveyed the market for the best tool for pre-trade pricing analytics it became clear that of the companies offering risk management analytics for the freight market, SD was best able to offer the ability to easily use/bump implied volatilities and show spot/vol reports on both single trades and portfolios, saving us the time and ongoing maintenance costs associated with an in-house tool.”
SD offers financial institutions, maritime brokerages, ship owners, charterers, physical trading companies and energy firms a comprehensive solution to manage portfolio freight exposure and price, covering FFAs and options on FFAs on a wide range of vessel size and ocean routes.
Stephen Baker, UK head of SD comments: “Our unique combination of independent pricing, risk management, mark-to-market valuations, pre-trade analysis tools and extensive portfolio management capabilities, combined with our extensive knowledge of the freight markets and hedge fund industry meant we were able to configure and deliver the optimum solution for Bluewave’s needs.”
