Latest: Numerix buys PolyPaths to expand into fixed income

Numerix has acquired PolyPaths, a New York-based provider of analytics and risk management solutions, to ‘[expand] market expertise in structured finance and fixed income,’ the US firm stated on 2 August without disclosing the deal size.

By combining the strengths of Numerix and PolyPaths, we are able to deliver cutting-edge front-to-risk analytic solutions that address the evolving needs of our clients - Manny Conti, Numerix

The acquisition complements Numerix’s existing capabilities and broadens its analytics asset class coverage. The enhanced capability in asset liability management (ALM) extends Numerix's reach beyond the trading book to the banking book, according to the statement.

‘By combining the strengths of Numerix and PolyPaths, we are able to deliver cutting-edge front-to-risk analytic solutions that address the evolving needs of our clients,’ Numerix CEO Manny Conti (pictured), said in the statement.

Founded in 1996, Numerix provides multi-asset class pricing tools to manage risks for derivatives, fixed-income securities as well as analytics and quantitative research. Last August the firm was acquired by US private equity firm Genstar Capital.

Whitehorse Liquidity Partners raises over US$5 billion

The Toronto-based specialised investment manager, which provides structured liquidity solutions for private equity portfolios, has closed a US$5.3 billion fundraising, which marks its fifth and largest fund since its inception in 2015. Asset under management are now at US$13.5 billion, according to the firm’s statement on 1 August.

‘As many private equity investors remain overallocated to the asset class and general partners seek thoughtful financing providers for their balance sheets, we believe the demand for our customized portfolio financing solutions will remain high,’ said Yann Robard (right), managing partner of Whitehorse.

The secondary investor said it has ‘identified what it believes is a significant and untapped market opportunity in the utilisation of structured products to generate liquidity on private equity portfolios’.

Whitehorse has deployed over 200 transactions with a value of over US$18 billion within the last eight years, according to the statement.

CME Group’s revenue rises in Q2

The US derivatives exchange has reported a 10% year-on-year (YoY) increase in revenue, which comes to US$1.4 billion in Q2 2023, according to a statement on 25 July.

On an adjusted basis, net income rose 17% to US$836m during the quarter, or US$2.30 per share, YoY.

Daily volume averaged 22.9 million contracts. Non-US average daily volume (ADV) reached 6.3 million contracts, which included double-digit growth in its agricultural, metals and energy products YoY.

The ADV of equity index options rose four percent to 1.24 million contracts YoY as more market participants turned to ‘the expanded product choice and liquidity’ such suite offers.

‘Given ongoing uncertainty in both macroeconomic and geopolitical environments, market participants continued turning to CME Group risk management products and services in Q2, with particularly noteworthy volume increases across our interest rate, commodity and options contracts,’ said Terry Duffy (right), the bourse’s CEO and chairman..

India: no proposal to curb retail participation in equity derivative markets

The Securities and Exchange Board of India (SEBI) said that while there was no proposal to curb retail participation in the equity derivative markets, it was considering a client risk assessment that would ‘promote ease of compliance for brokers and investors,’ according to a statement on 29 July.

The clarification came after some reports that the financial regulator would propose linking the amount of equity derivatives traded by retail investors to the their wealth.

‘SEBI’s focus has always been on adequate risk management, while ensuring ease of doing business and compliance, rather than on placing any curbs on trading,’ read the statement, adding that proposals that could change the regulatory framework would ‘go through a process of comprehensive consultation with all stakeholders including the public before any decision is taken by the board.’

Korean regulator identifies derivative irregularities

The South Korea’s financial supervisory service (FSS) said on 30 July that it found irregularities regarding the trading of an equity derivative that caused a handful of stocks to crash in April.

The financial watchdog reported misleading advertisements and a lack of monitoring regarding contracts for differences (CfD) securities on or around 24 April.

Over KRW13 trillion (US$9.7 billion) market capitalisation was wiped out within a month due to a stock manipulation scheme allegedly led by Ra Deok-yeon, a key suspect who ran a quasi-investment advisory firm to pump up the prices of at least eight stocks over three years.

False advertisements by such advisory firms included promoting themselves to have a distinct leverage in trading when other firms offered the same services. The firms did not properly inform their clients about CfD risk factors, which are highly advanced financial products, according to FSS.