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Lighthouse Partners adds Credit Value Adjustment (CVA) calculations to managed accounts

Tuesday, June 25, 2013
Opalesque Industry Update: SS&C Technologies Holdings, Inc., a global provider of financial services software and software-enabled services, today announced Lighthouse Partners has expanded its relationship with SS&C GlobeOp to include Credit Value Adjustment (CVA) calculations for the firm’s managed accounts program.

CVA is an adjustment to the value of OTC derivatives contracts that reflects the risk of counterparty defaults. The complexity of CVA calculations combined with a strong market focus on managing counterparty credit risk led Lighthouse to outsource its CVA calculations to SS&C GlobeOp. Under the terms of the agreement, SS&C GlobeOp will perform CVA calculations and report to Lighthouse on a monthly basis. The methodology applied by SS&C GlobeOp utilizes market-observable credit spreads and is consistent with ASC Topic 820, US GAAP and IFRS 13 fair value guidelines. Netting agreements and collateralization are factored into the CVA calculations.

“We consider SS&C GlobeOp to be a strategic partner to us. The addition of the CVA calculations provided by SS&C GlobeOp is an important enhancement to the production efficiencies on our managed account program,” said Robert Swan, Chief Operating Officer, Lighthouse Partners. “These services ensure the timeliness of applying a fair value to all positions in accordance with FASB accounting standards. Lighthouse is at the forefront of implementing industry leading risk mitigation initiatives.”

“CVA calculation has become an essential measurement for risk management and financial reporting, and can be a challenging process,” said Eric Reichenberg, Managing Director of Valuation Services, SS&C GlobeOp. “We enable our clients to become early adopters of industry best practices and overcome these challenges. We are pleased to extend the scope of mission-critical services we deliver to Lighthouse.”

Lighthouse Partners

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BM

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