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Prediction Dynamics receives new funding 
Wednesday, June 13 2001
by Rory Kelleher


Irish risk management software company Prediction Dynamics has received
EUR650,000 in first round funding from ACT Venture Capital.



The money will be used mainly to ready its Crucible product for market by the
fourth quarter of this year according to Paul Donnelly, chief executive of the
company.

Prediction also plans to recruit up to 15 new staff, mainly in the product
delivery area, by the end of the year. The company currently employs seven.

Donnelly said Crucible uses neural networks and new econometrics methods to
predict the future financial behaviour of markets. He said it could be used to
assess the value at risk of investment portfolios on a real time basis. The value
at risk of a portfolio is how much the value of the portfolio is increasing or
decreasing and dictates what level of risk is assigned to an investment
portfolio.

Donnelly said with the speed of change in market conditions investment managers
who may have invested in a low risk portfolio could find themselves with a high
risk one within days.

Crucible would constantly update investment managers on the risk rating of their
portfolio.

The software is also designed for systematic trading for investment houses by
modelling the future financial behaviour of markets using predictive financial
return and volatility models.

The product is targeted at hedge funds and top tier investment banks in the major
financial centres.

Crucible will go into commercial trials in the third quarter of this year and
Donnelly said the company expected to have its first contract in the fourth
quarter of the year.

He said the company had already canvassed the sector on what kind of functions it
wanted in a risk management product.

The company plans to open a sales office in London.

Donnelly said the company had filed for three patents for its software.

Despite the current depressed state of the technology sector, Donnelly said the
company had no problems in securing funding.

Research from the International Data Corporation showed the risk management
market growing from around USD3.7 billion in 2000 to USD6.1 billion in 2005.