Alpha generation platforms are designed to streamline and hasten the development of trading algorithms by quantitative analysts working primarily in hedge funds, as well as on the prop desks of investment banks. They enable these analysts to respond to the challenges of intraday strategy development, which cannot rely on the overnight back testing that strategies with longer lifecycles can.
As such, Deltix is in competition with other small shops such as Alphacet and 4th Story. Aite Group, the frontrunner in alpha generation technology, also includes ClariFI (now part of Standard & Poor’s) in this category, though that company only focuses on equities and does not address intraday requirements. Its ambitions are somewhat broader, however, in that its platform already has the ability to offer execution management, so adding broker connectivity is a logical extension.
While its background is on the quantitative research and algorithm development side, Deltix’s strategy is closer to that of another competitor in its space, QuantHouse, which started life as a ticker plant/feed handler and broker connectivity provider, and later acquired an alpha generation platform development called SmartQuant in 2007.
The company’s product offering consists of two parts: QuantOffice Framework, the desktop side where an analyst develops a strategy; and QuantServer, which is where it is put into production (including time-series data warehouse), with adaptors for receiving data from sources such as Bloomberg, Thomson Reuters, Compustat, and RealTick among others. The recent addition to its core capabilities was the connectivity of QuantServer with prime brokers such as ITG.