Strategic deal expands derivatives valuation services and IHS Markit team in Paris
Analytics and solutions provider IHS Markit has acquired DeriveXperts, a provider of valuation services for OTC derivatives and other complex financial securities in a move to complement and enhance its existing derivatives data and valuations businesses.
"IHS Markit strives to be the best source of independent valuations of OTC derivatives and other complex financial assets and this expansion shows our commitment to providing customers with exceptional coverage and quality," said
Gianluca Biagini, managing director for derivatives data and valuation services at IHS Markit, said that DeriveXperts' "skilled team and a high-quality service" will help IHS Markit to extend its offering for derivatives, particularly in equity-linked products, an area where the firm has seen growth across all of its customer segments.
"DeriveXperts brings us an efficient way to expand in certain equity derivatives and other equity linked products such as structured notes, which are growth areas in capital markets," said Biagini. "Acquiring DeriveXperts is an efficient way for us to gain a team of skilled experts, enhance coverage and frequency for certain equity derivatives and expand our customer relationships, particularly French-speaking buyside firms in Europe. This strategic deal also expands our team in France, an important market for IHS Markit."
Beyond pricing/valuation services HIS Markit is also expanding its valuation business to respond to the needs from clients around life cycle management, portfolio management, and post-trade reporting.
"We are expanding in a number of areas, including scenario/risk services, initial margin calculation and collateral management via our partnership with Cloud Margin," said Biagini, adding that the firm's differentiating factor in the pricing and valuation competitive landscape is its "people, the quantity and quality of data we can incorporate into our valuations and the overall level of service it provides. "This acquisition helps us further cement our position as a clear market leader."
IHS Markit which has more than 100 employees in Paris provides pricing and valuation services, including independent mark-to-market valuations and risk analytics, for vanilla and exotic OTC derivatives, fixed income cash products, private equity and illiquid debt investments. Valuations are accompanied by detailed inputs, liquidity metrics and reference data to provide maximum transparency and market context. Customers include insurance companies, asset managers, fund administrators, custodians and banks.
DeriveXperts which is headquartered in Paris and was founded in 2003, specializes in daily and monthly computations of hard-to-value assets, such as equity derivatives, FX derivatives, interest rate derivatives and structured notes.
IHS Markit was one of eleven firms working on a pilot project to manage equity swap transactions and related post-trade lifecycle events to complete the second phase of peer-to-peer blockchain infrastructure for equity swaps processing in November 2017. The participant group included seven swap market participants from both the sell-side and buy-side including BNP Paribas, Citi, Credit Suisse, Canada Pension Plan Investment Board, Goldman Sachs, JP Morgan and Thomson Reuters.
Also in Q4 2017, IHS Markit launched a cross asset class registry of systematic internalisers (SIs) to help firms understand their trade reporting obligations under the Markets in Financial Instruments Directive (Mifid 2) which covers all asset classes covered by Esma Regulatory Technical Standards (RTS 2), including bonds, all classes of OTC derivatives, equities, equity-like instruments and structured products.
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