This is rather an odd press release as it is pretty short on detail, but as Collateral Management is becoming increasingly important (indeed the FSA stated at the start of this year that they would be keeping a close eye on it this year) and given the lack of too many software solutions out there (and I think Allustra's is one of the best) I thought I would include it for you:

29 May 2008

In their pursuit of greater returns, investment managers are increasingly turning from traditional long-only to “130/30” strategies, which focus on using the proceeds of short selling (the X%) to fund additional long positions (the 100+X%) within portfolios. The implementation of such strategies for funds not only changes their risk profile in a major way but also introduces extra degrees of operational complexity, new infrastructure requirements, and new levels of understanding.

Most significantly, this creates the need for new, advanced and more specialised collateral management: not only to guide managers through complicated rules, such as those in the US’s 1940 Act and the EU’s UCITS III, but also, very importantly, to give them the tools to reduce their risk. With this in mind, Allustra today highlights the new capabilities of its its industry-leading, collateral and margin management solution, Kyros. These offer sophisticated features that provide expert support to both investment managers and prime brokers as greater and greater use is made of “Active Enhanced Strategies”.

Whether funds are shorting physically, through a securities-lending approach, or synthetically, by using derivatives and portfolio swaps, Kyros can seamlessly collate and allocate all the elements of portfolios according to the rules of CSAs and other agreements: the 1X0 long positions (securities and uninvested cash) and the X0 short positions (stock borrows, reverse repos or derivatives). Kyros then automatically calculates the latest margin requirements and leverage ratios, providing efficient and effective end to end management of the collateral process.

Mark James, Allustra’s Managing Director, comments, “The new operational needs of UCITS III and 1X0/X0 strategies have, in some cases, rather overwhelmed the market, especially when it comes to collateral and margin management. I’m pleased to say the powerful features built into Allustra’s Kyros can now help collateral managers securely and confidently support these new strategies.”