Gravitas Technology is rolling out a risk-assessment service whose resulting reports would address the varying needs of hedge fund regulators, limited partners and investment committees.
Working under the brand name Risk-As-A-Service, Gravitas would equip fund managers with the technology and staff needed to measure the impact of market events and trades across their portfolios. A key selling point: Clients could hand over those tasks to a single vendor.
Hedge funds routinely deliver complex reports on position, liquidity and counterparty risk to regulators, backers and their own investment committees. Because those parties often have vastly different ideas of what constitutes risk, however, managers sometimes hire separate service providers to generate the needed documents for each group.
Gravitas proposes to streamline the process, while taking advantage of a growing willingness among fund operators to farm out such functions to outside companies. “They are realizing some of these things are commodities. They don’t need to control everything,” Gravitas founder Jayesh Punater said.
Gravitas is best known for helping hedge funds set up and run information-technology systems. Its push into risk-management technology comes as regulators and institutional investors are increasingly demanding that managers implement high-quality infrastructures, even as backers also push for lower fees.
The firm is offering the service in conjunction with IBM Risk Analytics, a Web-based operation that gives investment specialists, traders and corporate treasurers on-demand access to tools for portfolio construction, risk management and reporting. IBM launched the business in 2011, following its $320 million acquisition of Toronto-based Algorithmics.
Punater founded Gravitas in 1996 with an initial focus on selling information-technology support to brokerage houses. The New York firm began to shift its focus to alternative-investment firms in 2004, immediately snaring a number of high-profile managers as clients.