JP Morgan’s Prime Brokerage business and
Sophis, the cross-asset, front-to-back portfolio and risk management technology firm, have launched a new system called iSophis that will allow hedge funds to manage their portfolios across multiple prime brokers.

The system, iSophis, provides integrated portfolio and risk management services through an application service provider (ASP) model, operating through a secure platform on a hosting site. This means that clients can access the service from any internet connection.

iSophis provides users with in-depth reports on P&L analysis, performance attribution, and risk exposure. The system can also help hedge funds calculate risk measurements including stress testing as they scale up their trading volumes or broaden existing strategies to include additional asset classes, Sophis said in a statement.

Following the collapse of Lehman Brothers, many hedge funds have added a second or even third prime broker as a means of diversifying their vendor risk. However, the trend towards using multiple prime brokers has created its own problems, necessitating the consolidation of disparate reports and adding to the complexities of risk management.

“Hedge funds are looking for ways to manage risk, value their portfolios across multiple prime broker relationships, and monitor performance. Through iSophis we can now offer our clients an aggregate view of their assets held across all of their prime brokers which provides not only sophisticated cross-asset portfolio and risk management capabilities, but also instant and remote access to these reports through the power of an ASP,” said Lou Lebedin, co-head of JP Morgan’s Prime Brokerage business.

“iSophis allows hedge funds to benefit from the same technology used in many large financial institutions, for a fraction of the investment required to manage a system in house. Managers can now spend less time worrying about their technology and infrastructure and more time managing clients’ assets.”