Capitolis, a financial technology company based in New
York, acquired Capitalab from BGC Group for $46 million. The latter specializes
in rates portfolio compression and margin optimization. This practice involves
replacing or reducing the size of over-the-counter derivative positions.
Capitolis Boosts Derivatives Operations
According to the official announcement, the deal could
enhance Capitolis’ capacity in the rates portfolio compression market, where
Capitalab has reportedly compressed over $10 trillion in options contracts.
Commenting about the acquisition, Gil Mandelzis, the
CEO and Founder of Capitolis, said: “Portfolio compression and margin
optimization are extremely important to the capital markets and, when properly
executed, truly help the financial system and its participants.”
“Capitalab’s highly innovative technology complements our existing suite of award-winning solutions, and together, we will create a ‘one-stop-shop’ for compression. We look forward to welcoming the team and
believe that together, we can take their unique offering to the next level.”
Executive Changes
The acquisition involves executive changes by
Capitolis. Gavin Jackson, the company’s Founder and CEO, will reportedly join
Capitolis’ executive team following the transaction. Capitolis has recently been expanding its operations
through partnerships with major global financial institutions, including Citi,
Morgan Stanley, and UBS.
“We are thrilled to join forces with Capitolis, which will allow us to combine our strengths, talents, and shared vision to create something even more remarkable,” said Gavin Jackson, the Founder and CEO of Capitalab.
“This powerful combination will enable us to deliver
an even more exceptional service to our clients, ensuring their needs remain at
the heart of everything we do.”
In July, Capitolis launched a new technology to reduce
the time and resources needed for banks, brokers, and hedge fund firms in
approval processes. The firm described the achievement as a milestone in
executing same-day tear-ups for FX options.
The added platform seeks to reduce the time for transaction
approval to T+1 or for up to 70% of all novations. Mandelzis mentioned that:
“Capitolis had already made tremendous strides in reducing market risk,
enabling more novations, and enhancing balance sheet efficiency for our
participants.”
“Over the past year, we’ve seen a nearly 50% increase
in volume on the platform and added many new FX prime brokers, executing banks,
and significant buy-side participants.”
This article was written by Jared Kirui at www.financemagnates.com.
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