Client: Global Hedge Fund With Over $30 Billion In Assets

Situation

Company wanted to grow their commodity business to broaden their trading strategies and increase financial performance. Existing solutions focused on trading financial markets (e.g. equities, fixed income and foreign exchange). The current technology platforms did not support the commodity markets including physical base metals, precious metals, power and natural gas. New functionality and tools were needed to accommodate the unique aspects of physical commodity trading, including inventory management, forward curves and commodity risk analysis.

Challenge 

The company has robust set of core capabilities and tools around trading including risk platforms, reconciliation and reporting. The commodity trading business and the application to support commodity trading needed to be integrated with those core capabilities and standards. At the same time, the detailed unique considerations of commodity trading had to be addressed. This included tailoring the processes and tools as well as getting midoffice, back-office and technology groups up-to-speed on commodity trading.

Approach 

Veritas worked with the client to advise them on their decision to select Openlink Endur as their commodity trading and risk management (CTRM) platform. Veritas developed an architecture that allowed Endur to be the core solution but still interact with over 15 applications that were critical to the company’s overall operational framework. That architecture included setting up Endur’s flash reporting capabilities to provide real-time data for some interfaces as well as developing a datahub to normalize data and allow for robust end-of-day official reporting and feeds to other systems. Veritas also configured Endur to support the business including defining risk curves, validating analytics, building out inventory management tools, implementing a historical Value at Risk (VaR) calculation and setting up accounting.

Results 

Endur was successfully implemented in less than 12 months including the datahub and numerous complex interfaces. We were able to configure Endur to support the business and provide a foundational platform that other critical applications could connect to including advanced analytical tools and their accounting solution. Veritas was able to set up complex price / volatility curves and validate the risk reporting including VaR. We also developed enhancements within Endur including functionality around inventory management, broker fees, futures cascading and options exercise and end-of day automation.

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At Veritas Total Solutions is a management consulting firm that is focused on the energy industry. Our recent projects have helped clients achieve reduced operating costs, higher levels of business performance and standardization around best practices. We have achieved this through a combination of strategy, technology, and business process optimization; including CTRM Systems. We value our clients and are proud to make an impact on their business. If you want to chat with us or if you are interested in learning more about our specific capabilities, contact us or subscribe to our podcast and blog to stay connected.