Best Buy-Side EMS: Portware
DURING 2013, PORTWARE built on the momentum of its Alpha Vision product, which it had rolled out the year before, with the goal of putting the tools of machine-based intelligence to work for traders. The company added data-visualization tools, which allow traders to ‘see’ what’s important without having to comb through reams of numbers.
Alfred Eskandar, Portware’s chief executive since February 2012, sees fundamental changes in the way that capital-markets firms approach trading systems, in which a one-size-fits-all approach is being replaced by bespoke systems.
“The biggest shift has been from seeking efficiencies to cut costs, to really seeking customization to drive performance,” Eskandar told Markets Media. “Large, long-only institutions are now using technology to drive performance as the #1 criteria, and they are realizing the benefits of predictive analytic and artificial-intelligence models.”
Portware has aimed to ‘democratize’ machine-based intelligence through Alpha Vision, bringing machine-based intelligence to a much broader swath of the trading sector. “This might have been something that was done previously by high-frequency trading firms or quant hedge funds, but it wasn’t something that was really utilized within the walls of a traditional asset manager,” said Eskandar.
“What we’ve done is made artificial-intelligence capabilities available now where you don’t have to build your own infrastructure, you just customize it to suit your style and benchmarks,” he continued. “What’s really driven a lot of our sales is the ability for these institutions to just bring in their competitive advantage into our software and technology.”
Portware’s goal in 2013 was to carve out a new category, namely, a ‘thinking’ execution management system powered by artificial intelligence. While mainstream EMSs have helped institutions, brokers and exchanges connect electronically and trade efficiently, Eskandar noted there haven’t been many interesting or innovative breakthroughs — which is not a surprise in the risk averse, capital-constrained market of recent years.
Alpha Vision is an algorithmic-optimization product that uses predictive analytics to help traders deploy the right algorithm in the right market conditions. According to Eskandar, the software communicates directly with traders in real time, giving them unprecedented levels of control and information, or color, on each order.
“We are working with a group of progressive institutions who are paving a new path that I’m certain others are going to follow,” he said.
Eskandar observed that there are few, if any, truly multi-asset and global EMSs. If 2012 marked the debut of the thinking EMS, 2013 marked its growth: last year, Portware signed on clients with about $2 trillion in total assets under management.
“Giving traders real-time color, transaction cost analysis, and commission-management features embedded into their workflow is paying off,” Eskandar said. “Traders always want to know ‘What’s happening with my order?’ We’re able to have the machine tell them what’s happening with their order.”
“What is your order looking to do? What is the current thinking? What is the current strategy or execution schedule for your order and why?,” Eskandar continued. “The ability for us to make algos ‘talk’ has been a huge benefit for our clients.”
Eskandar said the customization of EMS technology is being adopted by sell-side banks as well as buy-side institutions. “Being a software company enables us to partner with brokers to deliver new services and products without conflict,” he said. “Our responsibility is to be a conduit to help improve that connection between brokers and clients.”
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