HIGHLIGHTS
Client: Frame Financial Systems
Objectives
Offer Kensington Capital advisory clients (and other like-minded advisory firms) access to fast and sophisticated pricing analytics
Requirements
- Valuation tool providing powerful analytics
- Flexible architecture for ease of custom solution development
“A key differentiator of FINCAD is the excellence of their support team."
Jim Moore, President of Frame Financial Systems
Background
Frame Financial Systems, LLC is a FinTech business providing pricing and risk analytics solutions. Frame's client, Kensington Capital Advsiors, LLC is an SEC and MSRB registered Municipal Advisor and a CFTC registered Commodity Trading Advisor.
Kensington is focused on derivative applications and structured finance. The firm requires advanced derivative modeling capabilities to assist clients in the structuring, negotiation and execution of hedging activities.
Challenge
Kensington uses Frame Financial Systems (Frame), as a solution to its valuation and risk analytics needs. Prior to choosing Frame, Kensington required multiple vendor systems to support its clients’ pricing requirements. Under this approach, adding product valuations across asset classes was complicated and meant toggling among several applications. Furthermore, this array of systems, prohibited custom workflow development for specific needs.
Solution
Kensington selected FINCAD to power the Frame solution because of the flexibility, sophisticated valuation processing capabilities and FINCAD’s excellent Client Services support team.
“FINCAD's flexible framework allowed us to customize the design of our offering. We have one cloud environment for the user interface and another cloud environment for the platform and analytics database. These two environments are able to connect and communicate seamlessly,” said Jim Moore, President of Frame Financial Systems.
Results
Fast Analytics: Utilizing the Frame solution, powered by FINCAD, Kensington is able to provide robust quantitative risk analysis, including fast and sophisticated analytical support to its clients who are evaluating new hedging contracts or monitoring the effectiveness of existing hedges.
Flexibility: “One area we are really benefiting from is the flexibility that exists between Frame and FINCAD. This is helping us quickly adapt. For example, we can add the ability to support a new asset class or get access to a new valuation component in FINCAD that we may not have previously needed. We can accomplish such tasks quickly without sacrificing our workflow requirements,” said Jeff Klein, Principal, Kensington Capital Advisors.
Improved Pricing: Kensington is able to price and analyze portfolios with assets and hedges together in a single platform, where it can control the curves it is valuing against. Consolidated risk reports can then be generated.
Better Accuracy: Kensington has improved accuracy for multi-strike interest rate options. As a result, Kensington can now quickly and accurately value portfolios consisting of multi-index, multi-strike options.
Expert Support: “A key differentiator of FINCAD is the excellence of their support team. These individuals are dedicated to helping clients in any way they can, and have been highly responsive to our needs,” said Jim.
Looking Forward
Looking forward, Kensington plans to use the Frame solution to meet the continual changes happening in the OTC derivatives marketplace, without needing to redesign new versions of their software. Furthermore, Frame’s technology setup allows Kensington to easily bolt on functionality as client needs change, helping them continue to respond quickly to client demands.
"One area we are really benefiting from is the flexibility that exists between Frame and FINCAD. This is helping us quickly adapt.”