I spoke with Jo Finnigan (COO) and Jon Fox (CEO) Of Topaz Technology this week. Like many vendors in the space, it has seen a lot of activity in the market and has a full pipeline of prospects despite a short lull over the summer, Jo told me. It has also been busy with several free trials, which it offers to interested and suitable companies. It is, she told me, in the final stages with several prospects that include hedge funds, utilities and so on with expectations of news later in the year. She added to this by explaining how Topaz has been rolled out to other trading desks at an existing large client as well.
The vendor also has been busy with development and put out a major release recently in the form of version 2.0. This release, in part, featured a complete re-architecting of the Topaz storage mechanism for even faster performance and larger trade volumes, Jon told me. It also included a lot of work around valuation including a new swing option capability for energy markets, valuation and Greeks for spark spread options, full support for petrochemicals, a pre-trade structuring tool and much more. It is also adding more in and around valuation to provide a little more extensibility for customers who desire it.
Jon clearly sees the ongoing energy transition as driving a lot of market activity. “People are putting a stake in the ground now on sourcing renewables and that leads to some interesting challenges,” he said. He sees interest in more real-time MtM and managing large portfolios in real-time, for example. “There is lots of (vendor) competition at the short end of the curve, so we are looking more at the asset side of the curve,” he said.
Topaz seems to us to be more of an advanced risk analytics and even real-time risk management platform although it does have quite a lot of functionality that traditionally might fall into the E/CTRM category as well. With rising prices and volatilities set to be a medium-term feature of energy and broader commodity markets, we do expect platforms like Topaz to be in demand as many seek additional real-time risk tools to supplement or replace what they have historically relied on.