“As long as hedge funds have access to the right infrastructure to support their trading, we see more widespread adoption.”
TORA, the fintech providing an order, execution & portfolio management trading system with transaction cost analysis, is having quite a year.
In February, LSEG agreed to acquire the firm for $325 million, looking to expand its digital asset capabilities and strengthen its multi asset solution.
We spoke with Chris Jenkins, Managing Director at TORA, to learn more about the firm’s new role at LSEG and the digital asset solution, Caspian, as the addition of digital assets to LSEG’s trading capabilities strengthens its presence in this rapidly expanding asset class, at a time when institutional market participants are increasing exposure to crypto and other digital assets.
How is LSEG integrating TORA following the $325 million acquisition?
The deal is expected to close in the second half of the year, subject to global regulatory approval. When complete, TORA will sit within LSEG’s Data & Analytics division as part of its Trading & Banking Solutions business. TORA will further enhance the global footprint of the division, whilst enabling customers to benefit from a differentiated trading solution by combining the multi-asset class capabilities of TORA’s software with LSEG’s rich data and analytics services. TORA will help LSEG deliver critical “at trade” capabilities for the buy side and provide best-in-class solutions for customers.
What is Caspian and what was its role in the deal with LSEG?
Caspian delivers institutional-grade trading technology in digital assets. The company offers a complete asset management solution that covers the full lifecycle of crypto trades. It provides a single interface to all major crypto exchanges and OTC providers including sophisticated crypto algorithms, real-time and historical P&L, and exposure tracking. This will allow LSEG to broaden its crypto offering for institutional investors and strengthen its presence in the rapidly expanding asset class. Caspian removes barriers that stood in the way of institutional investors placing serious investments in digital assets.
How can hedge funds enter the crypto wave with compliance, safety, and liquidity?
No matter what their strategy, hedge funds have strict requirements around trading. Crypto is no exception. For any hedge fund looking seriously at crypto, institutional-grade infrastructure to support their investment and trading operations is vital. Hedge funds have significantly more complex requirements than the retail sector. To successfully manage their investment and trading activities in digital assets, they need the same scalability, connectivity, reliability, and support they rely on for other asset classes.
Our portfolio management functionality allows hedge funds an array of features including full-time monitoring of positions, valuations across exchanges and wallets, full transaction history, reconciliation tools, granular P&L analysis on both real-time and historical bases, comprehensive risk monitoring and an extensive suite of compliance functionality, including comprehensive reporting. These technologies ensure hedge funds enter the market with the robust compliance, safety, and liquidity they can access in other asset classes.
Hedge funds investing in digital assets did better in 2021 than those who didn’t, but as the markets seem to be turning bearish in 2022, is crypto too much risk to bear?
The crypto market has historically been and continues to be volatile. For many hedge fund managers, this volatility opens up opportunities for alpha not available in traditional asset classes.
As long as hedge funds have access to the right infrastructure to support their trading, we see more widespread adoption. Cryptocurrency will not only be a viable investment but an extremely important asset class for institutional investors in the years ahead.