Atlanta, Ga.-based analytics provider Lucena Research is acting as a development partner for Bloomberg, after launching a set of quantitative, machine-learning-based analytical tools based on its cloud-enabled QuantDesk decision support platform for Bloomberg’s Application Portal store of third-party apps.

Lucena began developing the tools—which enable hedge fund managers and investment advisors to study the impact of market events on stock prices—at the end of 2012, and has now been selected by Bloomberg to help users customize and extend the core functionality of the Bloomberg Professional terminal, after fully building out its offering on the app store through 2013.

“Many of Bloomberg’s clients are looking for ways to customize their use of the Bloomberg terminal with individual modules that will bridge selling processes, client relations processes and trade executions… so as we are now experts in modifying and extending Bloomberg’s core features, we are going to be a resource for customers who are in need of custom software implementations,” says Lucena co-founder and chief executive Erez Katz.

For example, Bloomberg terminal users may want to leverage Lucena’s Portfolio Optimizer technology to incorporate a back-testing report into their client communications so customers can view statistical forecasting-based research on their portfolio before placing trades to rebalance the portfolio. “In addition, they may want to automate trade execution into Bloomberg’s EMSX [Execution Management System] or other Bloomberg trading platforms directly from the Optimizer’s recommendations,” Katz adds.
Crucially, the partnership will help Lucena grow its predicative analysis business, particularly among larger institutional investment firms—who will be able to approach the vendor directly or may be referred by Bloomberg, depending on their requirements—as previously the vendor has worked more closely with small hedge fund managers and investment advisors. “So far, we have been able to penetrate emerging fund managers and small- to mid-cap companies, but larger entities have stayed beyond our reach as they are so highly regulated. Partnering with Bloomberg opens a brand new market for our offering to expand and build more credibility with the larger financial institutions,” Katz adds.

Meanwhile, the vendor is continuing to build out the functionality of its QuantDesk decision support platform, which leverages market data to forecast securities prices, optimize portfolio allocations, scan the markets to identify stocks to hedge portfolios, perform back-testing and create event studies.
Most recently, Lucena has added a new module, dubbed Portfolio Manager, that allows users to review past transactions to ascertain the accuracy of Lucena’s decision support technology—for example, how many of its predictions came true.

“We have a complete iteration with file upload capabilities, through which we can incorporate transaction files from any system in the world, and we provide a comprehensive set of reporting on those transactions that details their efficiency and what contributed to their overall portfolio performance,” Katz says. The reports enable asset and portfolio managers to demonstrate to clients how they arrive at investment decisions, and how their projections compare to actual results, he adds.

Source: Waters Technology