Published in Markets Media Magazine
Exchanges, broker-dealers, asset managers, trading platforms, and technology providers don’t earn acclaim on day one of their existence.
Time is needed. First, after the development of an idea and the launch of a business, it can take a while to attract a critical mass of customers. Then, a company has to show it can retain customers over a period of time. From there, additional time, perhaps years, is needed for a firm to rise to the top of its sector — that is, for the very small percentage of firms who manage to do that.
In the spirit of up-and-comers, we present The 2015 Markets Choice Companies To Watch. These are firms that may not be on the radar currently, or they are just working their way onto the radar. They are doing something interesting or innovative, and they have the right people behind them to establish themselves and make some noise in future years. Some of these companies can be classified as start-up or emerging, while others have been around a while but are gaining momentum and/or doing things differently than they used to.
It’s worth noting that as difficult as it is to select award winners, it may be even more difficult to name companies to watch, because the former group has a much more substantial track record. With watchlist companies, it’s a little more squishy and conceptual. But it’s also more fun to sift through a much broader universe of companies in search of the potential next big thing.
The 2015 Markets Choice Companies to Watch number a septet, led by Lime Brokerage, which provides one-stop-shopping for automated and quantitative traders and has refocused since a change in ownership in 2011.
Perhaps one or more of these Companies to Watch are future Markets Choice Award winners.
Launched only a year ago, Metamako specializes in ultra-low latency solutions for pre-trade, risk management and execution. In November 2014 the company announced the launch of MetaMux, which is designed as a fast switch with a built-in FPGA, which feeds aggregation as well as broadcast. MetaMux is a next-generation product, according to the company, with low deterministic latency of 4 nanoseconds for broadcast and about 100 nanoseconds for aggregation, considerably faster than other switches.
Metamako’s switches are specifically designed for financial markets and unlike generic switches are tailored to the requirements of banks, brokers, prop traders, clearers and exchanges. The company says its products help create a more level playing field for exchanges, and are used not just for high-speed trading, but also for event trading which may be very infrequent but where latency is of critical importance.
NanoSpeed provides trading, risk management and market data FPGA-based solutions to the trading community. The company launched its first product, Nano-TG, designed as an ultra-low latency trading gateway, in October 2013.
The company says its development model is unique, as its developers have a long history of architecting advanced solutions in the European aerospace industry, which is known for stringent development practices and performance.
NanoSpeed’s Nano-Risk FPGA launched in 2014. Used for pre-trade risk management in automated trading and HFT, the company says it is functionally rich and is compliant with key North American and European regulations, including CFTC’s Concept Release on Risk Controls and System Safeguards for Automated Trading, SEC’s 15C3-5 regulation and ESMA’s guidelines on automated trading.
According to NanoSpeed, performing risk checks on an FPGA takes under half a microsecond, or 50-100 times faster than using software.
Nirvana Solutions was founded in 2007, with the aim of delivering the financial sector’s first cloud-based portfolio management system built around the Financial Information Exchange (FIX) protocol.
The premise is that investment managers needed a reasonably priced, scalable system which enables them to minimize upfront capital outlay, and dedicate more hours towards alpha generation instead of back-office systems and data management.
According to the company, Nirvana Solutions products can provide aggregate real-time data across multiple counterparties, asset classes, funds and strategies; a pre-and-post trade compliance engine with built in alert system; continuous transaction processing, which simplifies intra-day and post-close middle- and back- office operations; a financial and risk data warehouse for management, compliance and investor reporting; and a fully hosted SaaS delivered application, with no hardware / software or IT infrastructure needed.
Based in New York, Nirvana Solutions is headed by Shams Karim, formerly a derivatives specialist at Morgan Stanley.
In 2013, LiquidityBook launched LBX platform, an HTML5-based web portal. The company says this provides multi-asset, buy-side portfolio management and sell-side order management interfaces, without requiring any software downloads or installs. The goal of LBX offering is to offer superior trading functionality and compliance to institutional traders. The product’s architecture incorporates the same “web-scale” technologies underpinning firms such as Google, Facebook, and Amazon, according to LiquidityBook.
LBX is broker- and vendor-neutral, the company said, and it integrates seamlessly with any FIX-capable execution management system. Users, which include hedge funds and broker-dealers, can select the underlying execution platform that best suits their specific needs.
LiquidityBook software is fully hosted, which the company says allows clients to not need to maintain servers or download any software onto their internal networks. It also eliminates ‘versioning’ problems and expedites installation time.
“Electronifie is a platform built by traders, for traders,” said Nicole Olson, chief strategy officer. “In 2014, we started having conversations with investors about the challenges they were facing in the corporate bond market. These conversations propelled us to action, and in less than a year, we built an anonymous all-to-all corporate bond trading platform to help unlock liquidity. Electronifie’s model is rooted in sophisticated technology that will enable us to unite investors in our marketplace to find a depth of liquidity and to execute trades efficiently.”
“We believe 2015 will be the year of meaningful evolution in corporate bond trading,” Olson told Markets Media. “Together with our clients, we’re evolving market structure a step forward to help solve the liquidity crisis in corporate bonds. Looking ahead, our efforts are focused on continuing to grow our diverse subscriber base, which already includes some of the world’s largest traditional asset managers, insurance companies, hedge funds and dealers.”
“Algomi is one of the most dynamic financial technology startups today,” said Stu Taylor, the company’s chief executive. “Founded just over two years ago, our company works with nine banks and 30 buy-side institutions using our Honeycomb software to increase the opportunities and velocity in large and illiquid voice trades in corporate bonds.”
“Growth comes from the strong demand we are seeing globally from banks and buy-side institutions for our technology and services,” Taylor told Markets Media. “We are also looking forward to the full launch of our Honeycomb product and expanding our suite of services to meet demand across the fixed income market.”
“We believe in the power of information and technology to help the fixed income market work more efficiently,” Taylor said. “We believe that our unique focus on voice trading will allow us to continue to have a strong presence in fixed income trading, especially large and illiquid trades.”