One platform for multiple asset classes
While setting up operations prior to launch, the partners at CastleKnight Management LP (“CastleKnight”) wanted to ensure they had the right platform to manage their event-driven / special situations strategy that invests opportunistically across multiple asset classes and capital structures of all sizes.
Chris Sullivan, CastleKnight’s Chief Operating Officer, Chief Financial Officer, and Chief Compliance Officer, had worked with several trading platforms over the last 30+ years. Prior to CastleKnight, he was COO at several notable start-ups including Diameter Capital, CFO at Anandar Capital, and Head of Middle Office and Operations at Blackstone’s GSO Capital. Given the small team at CastleKnight, he needed a solution that would enable a quick and efficient launch.
Head trader Matthew Cambria, who previously traded at Citadel, Blockhouse, and Mason Capital, proposed that CastleKnight look at Enfusion, a platform he actively used at a previous firm.
"The beauty of the Enfusion system is that it’s more than just an OMS or EMS platform,” said Cambria. “The system has a fully-integrated general ledger that completes the full trading cycle, from when traders enter tickets for counterparty confirmation, through to clearing broker allocation, and concluding with full administrator reconciliation on a T+1 basis. The system is capable of processing the entire capital structure. With Enfusion, I am able to trade with global desks 24 hours a day.”
CastleKnight conducted its due diligence and assessed several providers, both those familiar and new to the team, but they kept coming back to Enfusion.
“I had a lot of options to choose from, but I was focused on what was going to get me the biggest bang for the buck,” said Sullivan. “While I was fairly familiar with Enfusion’s capabilities from prior launches, I appreciated in launching CastleKnight how the platform’s capabilities had been expanded and enhanced over time. For example, Enfusion has come a long way in bank debt processing and is now best-in-class. We were able to hit the ground running with Enfusion, with little to no learning curve as a team on how to run it.”
With Enfusion, CastleKnight’s front office has been able to efficiently manage its event-driven / special situation strategy.
“The FIX connections on equities makes it very easy,” Cambria shared. “VCONs are blasted right into my blotter. Bank debt trades are very simple to put in and unwind. So, from my seat, Enfusion is just a very easy, seamless system to use. My days are busy, and just having a system that is as organized as Enfusion is critical.”
CastleKnight founder and portfolio manager Aaron Weitman also uses Enfusion on a daily basis. According to Cambria, “Weitman is a pretty aggressive portfolio manager, and we trade everything on Enfusion, whether it is warrants, preferreds, very esoteric preferreds, equity options, bonds, and bank debt.”
Sullivan is impressed with Enfusion’s middle- and back-office Managed Services offering, which enables him to focus on automated workflows. Leveraging Enfusion’s operations and accounting professionals provides CastleKnight with a scalable solution. According to Sullivan, Enfusion’s middle-office offering is essential to meeting the operational and accounting needs of every CFO.
“There are a lot of technologies out there and they might all cobble together to give us what we need to run CastleKnight,” said Sullivan. “But the value to me of Enfusion is its continuity and the flow-through to the middle office, execution, and settlements, and running every trade through it. The middle- and back-office solution is worth its weight in gold.”
Pushing through the headwinds of the COVID-19 pandemic, CastleKnight launched in October 2020. Enfusion stood up quickly, keeping CastleKnight’s front-, middle-, and back-offices in sync while staff was, at times, displaced or working remotely.
“I think Enfusion was a massive lifesaver during the pandemic,” said Sullivan. “Because Enfusion is cloud-based, we could access it from anywhere. We could function extremely well remotely. Enfusion’s Managed Services demonstrated their capabilities for getting our executions to clearance.”
Added Cambria, “We actually had to leave the office for over a week at one point and were all working from home. Enfusion was completely seamless as far as trading. Everything worked as if I was sitting in my office in New York.”
The CastleKnight team especially values how well Enfusion works with its fund administrator – as though they were in-house employees.
“This is my first experience using an outsourced team to manage middle-office and operations functions and I was impressed with the accuracy of the Enfusion team,” said Sullivan. “I effectively have a team at Enfusion always working on CastleKnight behind the scenes. This gives me a lot of flexibility.”
In closing, Sullivan shared, “I refer to Enfusion as a partner rather than as a vendor. Together, we aligned our interests to provide the best solution for CastleKnight clients in a coordinated and scalable fashion. Our operational infrastructure is built upon, and relies upon, this partnership. What’s more, our collaboration contributes to the enhancements Enfusion makes to its offering which benefits CastleKnight as well as all Enfusion users.”