Algo Suite IBM Algorithmics


Overview


Founded in 1989, Toronto-based Algorithmics was privately-owned until 2005 when it was acquired by the Fitch Group. Focused on the provision of a consistent, enterprise-wide view of risk management, the vendor now claims to have completed installations in 55 countries and has 23 offices. These comprise its headquarters in Toronto and further regional headquarters in London, New York and Singapore, plus sales centres elsewhere. Headcount was 836 at the end of the 2010 financial year (31st March 2011). Of these, the company claimed around 200 were in R&D, 250 in professional services and 110 in business lines.


Summary history 1989


Algorithmics established.


2000 Launch of Algo ALM and Algo Credit. 2000 Completes US$60 million strategic private financing involving AIG, Morgan Stanley, CIBC Capital Partners, and Royal Bank Capital Partners.


2000 With funds provided by the aforementioned private financing, Algorithmics acquires Sentry Financial Systems, a collateral management software supplier, for an undisclosed sum.


2001 Commerzbank and VenGrowth Investment Fund invest a further US$25 million in Algorithmics. 2004 2004


Unveils Linux and distributed computing version of Algo Suite. Secures long-term refinancing from its investors.


2005 Acquired by the Fitch Group in a deal valued at US$175 million. Fitch Group is a majority-owned subsidiary of Fimalac, an international business support services group based in Paris. In turn, Fitch is also the parent company of Fitch Ratings, the global rating agency.


2005 Algorithmics unveils Algo Suite 4.5, which includes the launch of Algo Credit Administrator and Algo OpVantage. The latter was basically the operational risk businesses of both Fitch and Algorithmics combined within one brand. Launch of the hosted version of Algo OpVar.


2009


2010 Acquires VIPitech, an actuarial software solution with financial modelling capabilities, from Towers Watson. Included in the acquisition were VIPitech's software solutions, intellectual property, infrastructure and the VIPitech team, including development, support, sales and marketing. The terms of the acquisition were not disclosed. It also brought over 100 users.


2011 Fitch Group sells Algorithmics to IBM for $387 million. The vendor is to be incorporated into IBM's business analytics and optimisation division.


2017 In July 2017, UK based RNA Analytics bought out Algo Financial Modeler from IBM. Products


Algorithmics boasts an extensive suite of applications de- signed to provide a broad, enterprise-wide view of risk man- agement. At the heart of this is the scenario-based framework it labels ‘Mark-to-Future’. This is intended to link disparate sources of risk and provide a means for calculating risk within a single, unified architecture.


The company came out of the wholesale banking/trading


sector, as opposed to others that have come from the ALM (asset liability management) side. As such, the supplier claims suitability for today’s ever greater need for real-time information. Traditionally,


it has focused on the sell-side,


although has found the buy-side to be an increasingly healthy part of the market as well, particularly in 2010 driven by Solvency II. The insurance business of ING was an important development partner in the insurance sector. Other buy-side


customers include hedge funds, asset managers and pension funds. Algorithmics was claiming around 80 to 90 buy-side customers by mid-2011.


Also driving banks to the door of Algo and others have been the changes in the OTC derivatives market, bringing interest from both Central Clearing Counterparties and clearing members. OTC clearing has brought a focus on cross- asset real-time margining and collateral management. As a subset of this, Algo claimed in June 2011 to be working with three large investment banks, one of which was Scotiabank, to develop Credit Value Adjustment (CVA) trading screens as an extension of its Algo Real-Time Credit Engine. As well as the components listed below, in 2011 it added


an over-arching dashboard which, it said, could also be used with any other risk applications. The Algo Strategic Business Planning Tool is intended to give CEOs, finance officers and others a picture of their overall positions, to allow optimisation


Risk Management Systems & Suppliers Report | www.ibsintelligence.com 55


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