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November 1, 2013

Citadel's New OMS for Long-Onlys


Peter Chapman

Citadel Technology, the vendor arm of the big hedge fund, is building out an order management system for traditional long-only asset managers. The platform is slated to be available in the third quarter of 2014 and would complement an OMS the vendor already offers to hedge funds.

"There are a lot of similarities between the operations of a long-only and an alternative asset manager," Stuart Breslow, managing director of Citadel Technology, said, "but then there are certain nuances. The two just look at the world differently." Hedge funds are focused on absolute returns, Breslow noted, while long-onlys are focused on relative returns. "We're in the process of enhancing the platform to appeal to a long-only client base."

The large majority of the vendor's technology-except that emanating from a new joint venture with Redi Holdings-came out of the Chicago-based hedge fund. It is still used there. The vendor is offering a comprehensive solution to cover all aspects of the investment management process, as well as individually licensed modules.

Citadel Technology LLC was formed four years ago, but it is only in the past year or so that the vendor has been operating as a bona fide business. The unit was created as a special purpose subsidiary in 2009 to facilitate a sale of Citadel's technology to one of the big hedge fund's investors, a sovereign wealth fund. In 2010, it made a similar sale to a pension fund. In 2011, the unit was used to facilitate a sale to a Citadel spin-off. In mid-2012, the unit went commercial upon the hiring of Breslow.


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