Reuters Buys Application Networks to Accelerate Growth in Its Risk Management Business

Reuters Trade and Risk Management practice generated revenues ofGBP 82 million in 2005 and is part of Reuters Enterprise division. Itprovides traders, heads of desk and risk and operations managers witha suite of trade and risk management software solutions to addresscore risk issues.

The sharp increase in volume trading of complex financialinstruments, and the growing dependence of banks on trading forprofits, means banks and hedge funds are increasingly reliant on thelatest real-time risk systems and technology to keep ahead of themarket.

Application Networks provides the cross-asset derivatives tradingplatform, JRisk, which is already in use at leading banks such as,JPMorgan Chase, Societe Generale, UBS and Wachovia. It recently signeda distribution agreement with GlobeOp - a leading provider of packagedservices to hedge funds.

Application Networks brings significant expertise to Reuters in agrowing market where management of risk is the key differentiator fortop performing global banks. The combination of the robustfunctionality of Reuters Kondor+ and the JRisk advanced technologyplatform will enable Reuters to meet the needs of customers lookingfor fast, flexible, integrated systems that cover all asset classes.

With this acquisition Reuters aims to become a clear market leaderinside two years in the GBP 1.5 billion global market for trade andrisk management systems.

Peter Moss, Global Head of Reuters Enterprise Solutions, said: "Weare committed to growing Reuters Trade and Risk Management as a keyproduct offering and this acquisition shows our determination to dothis. Managing the trade process and associated risk is increasinglycrucial to our clients and we aim to offer them an outstanding productbacked by Reuters global support network."

Andrew White, Reuters Global Head of Trade and Risk Management,said: "Reuters is accelerating the delivery of an advanced product tonew and existing customers. Backed by the global resources of Reuters,we believe it will become the leading choice for innovative banks andhedge funds."

Reuters and Application Networks clients will be given theopportunity to migrate to a new platform within the next 24 months.This will be called Kondor+ 4.0 and will combine JRisk's easilyupgradeable "services orientated architecture" with the provenfunctionality of Kondor+. Before then Reuters will release stagedupgrades to existing JRisk and Kondor+ users as the platformsconverge.

Senior managers from Application Networks will be joining Reutersfrom today. These include Application Networks CEO, Evrard vanHertsen, who becomes Head of Product and Strategy for Reuters Tradeand Risk Management; Lionel Simon who will lead Product Management,and Alex Hernandez, based in Palo Alto, who will become ChiefTechnology Officer for Reuters Trade and Risk Management.