Tag Archives: senahill

private-placement-bonds-electronic-trading

Fintech, Fixed Income Trading & Fragmentation-Now a Private Placement Bond Platform

Fintech Fixed Income Trading & Fragmentation-What’s Next? A Venue for Private Placement Bonds & MTNs

Despite the seeming oversupply of electronic bond trading initiatives, the convergence of fintech and fixed income trading continues to spawn new electronic trading start-ups, bringing the total industry count to 128 venues.  The latest player, dubbed “Origin Markets”, aims at filling a void in the $1.5 trillion Medium-Term Note space aka private placement bond market. The “still-in-beta mode” initiative is based in the UK and backed by a consortium of global banks led by BNP Paribas, Bank of America Merrill Lynch, Societe Generale and Credit Suisse.

origin-markets-electronic-platform-MTN
Raja Palaniappan CEO Origin Markets

Origin’s founder and quarterback is Raja Palaniappan, a former Credit Suisse flow trader and MIT wonk who cut his teeth trading MTNs at various firms during the past 9 years and was most recently a VP responsible for making markets in investment grade and crossover corporate bonds and CDS at Credit Suisse.

A spokesperson for UK-based Origin said its platform “simplifies issuance in the medium-term note private placement market by acting as a central information source.” The business model allows dealers to receive targeted funding levels from issuers on a single platform and allows users to foster new relationships through cloud-based technology and bank-grade security.

“[Issuers] can optimise their funding using the built-in cross-currency pricer, comparing their funding levels to their own and their peers’ levels in the secondary markets,” Origin said.

Joakim Holmstrom, head of funding at Municipality Finance, explained the platform makes the medium term note process more efficient and provides access to a broader pool of dealers. Ben Powell, head of funding for IFC, added that Origin’s platform “simplifies what was once a manual process prone to inefficiency. It allows us to manage our dealer communication in one central place.”

The platform’s full launch is expected later this year and brings the total number of electronic fixed income platforms to 128, according to a recent compilation of platforms by front office trading consultant John Greenan.

Bob Mahdavi, the CTO for private placement bond documentation firm Prospectus.com stated “The MTN market is indisputably one of the largest sectors in terms of number of issues, yet it is populated by thousands of private issues that don’t typically lend themselves to being traded in an electronic venue.” Added Mahdavi, whose firm works with tens of dozens of Issuers, as well as attorneys and boutique investment banks throughout Europe and Asia in preparing debt offering documents, “You can build it, but will they come?”

According to fintech merchant bankers at SenaHill Partners “When considering the still nascent stage impact of electronic venues focused public company investment grade corporate bonds, including the likes of startup Electronifie among others, a platform that can prove truly effective and liquid for MTNs can prove to be a big challenge, albeit the backing of big banks does provide some wind in the sail.”

If you’ve got fintech fever, or just a hot tip, a bright story idea profiling global macro, fintech, ETFs, options, or fixed income markets, or if you’d like to get visibility for your firm through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, etc., please reach out to MarketsMuse Corporate Communication Conciege via this link

As noted in a 11 Jan story in TheTradeNews and citing the work of Greenan, between November 2016 and January this year alone, 14 new fixed income trading platforms joined the market.

“…The asset class is overcrowded with trading venues as regulation forces the structure of fixed income across instruments away from a centralised model – mostly due to bank balance sheet constraints – towards a decentralised model….Market participants have said the explosion of venues is causing fragmentation and a ‘liquidity drought’ in global bond markets.”

Large buy-side firms and asset managers have the opportunity to act as price makers rather than price takers, according to a quarterly report published by the International Capital Market Association (ICMA) this week.

The report said the bond market has seen a decrease in ratio turnover, despite an increase in market size and overall turnover against a backdrop of bond issuance, as issuers take advantage of low interest rates globally.

Joanna Cound, head of public policy EMEA at Blackrock and a member of the ICMA board, explained this has led to liquidity in fixed income markets suffering, something regulators have taken a greater interest in over the last year.

Fixed income participants are wary the bond market has not improved significantly since the financial crisis, as future stress events could have far-reaching consequences.

To continue reading TheTradeNews story click here

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blockchain-equities-ats-overstock

What’s Next? A Blockchain-Powered ATS for Equities

“What’s Next? Well, for those familiar with Patrick Byrne, the controversial and innovative founder of Overstock.com, one of the first online retailers to embrace the use of bitcoins, it should not be a surprise that Overstock’s chief honcho would ‘get the joke’ and realize its all about the underlying technology that powers cryptocurrency applications, known as distributed ledger. While bitcoin currency continues to encounter challenges in terms of mass embracement, the real grease that makes the makes the wheels turn is under the hood. With that, Overstock subsidiary “T0” (T-zero) is taking a page from both the industry consortium formed by R3 and the Senahill-backed Symbiont –both of which target institutional capital markets usage–and aiming it’s own sights on retail investors by setting to launch an equities-centric Alternative Trading System aka ATS powered by their own blockchain formula.

A distributed ledger is a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, and/or institutions.
A blockchain is a type of distributed ledger, comprised of unchangable, digitally recorded data in packages called blocks.
Rob Daly of MarketsMedia (not related to MarketsMuse) provides the scoop..

Online retailer Overstock.com expects trading to begin on its blockchain-based alternative trading system before the end of the year, according to company officials.

The ATS will be operated by Overstock.com subsidiary TO as part of the company’s Medici Project, and it will only handle trades in the company stock, at least at first. So while it’s not an immediate competitive threat to the existing field of 13 U.S. stock exchanges plus several dozen ATSs, the initiative will be closely watched as a gauge of the potential of distributed-ledger technology in capital markets.

The ATS will write completed trades to its blockchain instead of routing them to the National Securities Clearing Corp., a subsidiary of Depository Trust & Clearing Corp., for clearing.

Overstock.com plans to prime the liquidity on the ATS through a new issue of corporate shares to existing shareholders the day before trading commences on the new trading venue.

judd bagley blockchain ATS
Judd Bagley

T0 officials plan to formally announce its partnership with a broker-dealer on Sept. 12. “For those who want to trade on the ATS, they will have to create an account with the broker-dealer,” said Overstock’s man-in-charge Judd Bagley, who declined to name the brokerage firm.

If you’ve got a hot tip, a bright idea, or if you’d like to get visibility for your firm through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, etc., please reach out to our Senior Editor

Investors will be able to select from multiple “very vanilla” order types, which are still in development, he added. T0 may use a so-called maker-taker rebate model to encourage liquidity, but officials have not made a final decision.

The new trading venue is a mix of internally developed technology and the technology T0 acquired with its purchase of order-routing firm SpeedRoute in October 2015. T0 built its matching engine internally as well as the necessary interfaces to the rest of the U.S. equity marketplace.

The company, in conjunction with Bay-area consultancy PeerNova, also developed a proprietary blockchain architecture for the ATS instead of using Bitcoin, Ethereum, or Ripple.

To continue reading the story from MarketsMedia, please click here

fintech-blockchain-bonds

Even Blockheads Get Blockchain and Corporate Bond Issuance

MarketsMuse fintech and fixed income curators are both noticing increasing upticks in stories relating to the use of blockchain technology specifically for use within the corporate bond issuance process. We might have been one of the first to focus on this application despite the early stage push back from IT blockheads within the securities industry who “didn’t get the joke”–but for those who missed the first memos, below is a good primer. The real meat is at the bottom.

(AllCoinNews)–This month, a paper examining how blockchain technology might be used to issue and trade bonds more effectively was published by the 2015 Freshfield Steven Lawrence Scholars. Aimed at first year law students in the UK, the Freshfields Stephen Lawrence Scholarship Scheme is designed to address under-representation of black men from low-income households in large commercial law firms.

In the paper, the scholars propose and analyse two different blockchain-leveraged bond trading systems, one that utilizes a closed pool of banks to verify transactions – Bond Blockchain 1.0, and another that relies on a open pool of individuals to verify transactions – Bond Blockchain 2.0.

According their paper, these two bond systems would have the same core characteristics. All bond issuers will have a user profile with two types of wallets, one for transferring bonds and the other for transferring money. Both wallets would contain the same unit types so they can be transferred on the same blockchain. To add units to the wallets, money needs be deposited or bonds need to be created through the the user interface. Metadata embedded in the units will distinguish whether units are currency or bonds. As a bond is purchased, two transactions take place in the system. Currency units are transferred from the investor’s money wallet to the issuer’s money wallet, while bond units are transferred to the issuer’s bond wallet to the investor’s bond wallet.

The major distinction between the closed and open pool systems is in who they serve. InBond Blockchain 1.0, the system using a closed pool of banks to verify transactions through blockchain technology, the bonds would only be available to institutional investors. This system’s innovation is the disintermediation of the clearing and settlement functions of the legacy bond trading system. The legacy system will no longer be needed as as the transfer and proof of bond ownership will be recorded in the blockchain and the digital account of the new owner. The benefits of Bond Blockchain 1.0 would be a reductions in costs resulting from removing intermediaries and a much quicker settlement time resulting from instant account transfers and blockchain verification in around 10 minutes.

MarketsMuse Editor Note: Towards understanding how/where/why blockchain technology is actually being implemented for use in corporate bond issuance, our curators encourage you to go directly to the source: fintech firm Symbiont –which is backed by among others, SenaHill Partners.

 

top fintech bankers

Institutional Investor’s Top-Ranked FinTech Bankers Include…

Institutional Investor Magazine has recently announced the world’s top 35 FinTech Bankers, and…

As astutely noted by Institutional Investor Magazine’s Senior Editor Jeffrey Kutler, “The origin of the term “fintech” is difficult to pinpoint; only very recently has it become an accepted label for one of the hottest segments of the technology market. The availability of high-­performance computing and low-cost distribution channels is attracting a steady stream of entrepreneurs with ideas for improving, if not revolutionizing, financial products and processes — and investors are in hot pursuit.”

With that lead in, MarketsMuse curators are happy to excerpt II’s latest ranking report, this one profiling the top fintech bankers and financiers. We extend a special salute and shout out to merchant bank SenaHill Partners, led by securities industry veterans Neil DeSena and Justin Brownhill—whose boutique merchang banking firm is ranked within the top 20 of 35 firms profiled by Institutional Investor’s global survey.

Institutional Investor’s first Fintech Finance 35 ranking turns a spotlight on the financiers who are abetting this flowering of innovation. They include deal makers at various stages of the investment cycle and facilitators of the incubating, mentoring and capital-­raising ecosystems that accelerate promising financial start-ups’ paths to commercialization.

According to one global tally, by consulting firm Accenture, fintech investment tripled in 2014, to $12.2 billion, its growth rate dwarfing the 63 percent for venture capital overall. Research firm CB Insights estimates that fintech’s share of total venture capital activity quadrupled between 2008 and 2014, to 12 percent.

That’s the big picture. Here we present perspectives on the boom through the lenses of some of its leading players. (To account for firms’ partnership structures, a total of 41 individuals are recognized.) Opinions and investment theses vary, as does the approach of a traditional venture fund manager compared with that of a corporate strategic investor. But all share a conviction that fintech is here to stay and an enthusiasm for the work, which neither begins nor ends when checks are issued. Venture capitalists typically meet with hundreds of prospects over the course of a year before making a relatively small handful of bets, and through board seats or other types of advisory relationships they provide ongoing guidance, often drawing from extensive industry experience.

The Fintech Finance 35 ranking was compiled by Institutional Investor editors and staff, with nominations and input from industry participants and experts. The evaluation criteria included individual achievements and leadership at the respective firms, influence in the community at large, and the size, reputation and impact of the respective funds and institutions in the financial technology industry — particularly in the current wave of fintech financing.

The Fintech Finance 35 was compiled under the direction of Senior Contributing Editor Jeffrey Kutler. Individual profiles were written by Kutler; Asia Bureau Chief Allen T. Cheng; Senior Writers Frances Denmark, Julie Segal and Aaron Timms; Research Staff Writer Jess Delaney; Senior Contributing Writer Katie Gilbert; Associate Editor Kaitlin Ugolik; and Editor Michael Peltz.

And, coming in at #18… Continue reading

symbiont_bitcoinist

Attention Wall Street BlockHeads: Get Your Bitcoins Here

MarketsMuse fintech update is a “bid on” to prior Wall Street bitcoin initiative coverage, and following is courtesy of excerpt from 4 Aug story by Bloomberg LP reporter Andrew Leising, ” Wall Street, Meet Block 368396, the Future of Finance.”

Justin Brownhill, SenaHill
Justin Brownhill, SenaHill

When Justin Brownhill wants to check up on one of his latest investments through fintech merchant bank SenaHill Partners LP, he only needs to check the ledger unpinning bitcoin. The address: block 368396.

That’s the new digital home for the equity stake his firm made in Symbiont, a startup using bitcoin’s underlying blockchain software to make it quicker and easier to prove ownership of assets or transfer them between buyers and sellers.

Putting its money where its mouth is, Symbiont on Tuesday morning digitized and published several of its equity investments to the blockchain, which drives the bitcoin digital currency. That means the stakes will forever be part of that public record, allowing dividend payments or stock-option conversions to happen automatically.

“I woke up this morning and thought, ‘This is a historic moment,’” Brownhill, a managing partner at New York-based SenaHill, said in an interview after the Symbiont presentation on Tuesday. The merchant bank has investments in over a dozen other private companies. “Our job now is to go and espouse the benefits to all our portfolio companies,” he said.

Wall Street is becoming enamored with the potentially transformational way blockchain could overhaul how derivatives, bonds, loans and other asset classes work, dramatically simplifying the process of tracking ownership and accelerating the transfer of assets from one person to another.

Smart Securities

Symbiont’s innovation is creating what it calls smart securities. The company is now practicing what it preaches: its founders’ stakes as well as shares and options granted to employees have been converted into encrypted code that lives in the bitcoin blockchain — the same ledger where any purchases and sales of the digital currency are recorded. Symbiont customers can do likewise to track changes in ownership interests.

“Today is the day crypto joins Wall Street,” Symbiont Chief Executive Officer Mark Smith said to the room full of investors, bankers and reporters in New York. Representatives of JPMorgan Chase & Co., Morgan Stanley and other financial institutions were among the audience members.

Symbiont’s not alone in trying to bring the blockchain to Wall Street. Other firms investigating finance-related uses of blockchain include Digital Asset Holdings LLC, headed by former JPMorgan Chase & Co. banker Blythe Masters; Nasdaq OMX Group Inc.; Ripple Labs; and the New York Stock Exchange.

In June, Symbiont raised $1.25 million from a group of investors including former NYSE chief Duncan Niederauer; former Citadel LLC executive Matt Andresen; two co-founders of high-frequency trading firm Getco LLC, Dan Tierney and Stephen Schuler; and SenaHill.

For the full story from Bloomberg LP, please click here

FinTech-Wall Street Wonks v. Silicon Valley Socializers

MarketsMuse special update-courtesy of MarketsMedia reporting with a refreshing reprieve from all-things Greece …While Silicon Valley salivates over the next social media-powered “Unicorn”, the global financial industry is fixated on FinTech. Just like the litany of aspiring app companies accelerating the ‘next great idea’ produced by West Coast Wonks, as noted in today’s coverage by the Wall Street-focused, tech-centric media platform, MarketsMedia.com, financial-technology startups need capital to turn their idea into a viable business, and more important in most cases, they need the right strategic advice to operate, expand and then potentially merge or sell the enterprise.

Venture capitalists and angel investors can provide initial funding; consultants can help with operations; investment banks can arrange additional capital raises and advise on M&A. SenaHill Partners is unique in that it has stitched together all that is needed over the ‘fintech’ lifecycle.

Our merchant-banking value proposition connects the dots at every strategic level between global financial institutions and the entrepreneurial innovators of financial technology,” SenaHill Managing Partner and Co-Founder Justin Brownhill told Markets Media in a June 29 telephone interview. “We feel that we can get the right ideas in front of the right people better than anyone else. That’s the mission of our organization.”

Neil DeSena, Senahill Partners
Neil DeSena, Senahill Partners

As profiled by MarketsMedia.com, New York-based SenaHill, founded in 2013 by Wall Street veterans Neil DeSena and Brownhill, offers principal investing via its SenaHill Investment Group, LLC unit, and investment banking through SenaHill Advisors, LLC.

Wall Street is a relationship-driven business, a fact that is not lost on SenaHill. The company splits its formidable roster of talent into two categories: active advisors, formerly top people in the financial industry who can help startup and emerging fintech companies get the right exposure and introductions; and inactive advisors, who provide guidance, insight and background from their current positions in the industry.

SenaHill’s advisors include Stanley Young, formerly the chief executive officer of NYSE Technologies; David Ogg, CEO and founder of Ogg Trading; Joseph Wald, CEO of Clearpool Group; Sam Ruiz, an independent advisor and former head of equities trading at Nomura; and Craig Marshall, a start-up vet who is credited with creating the general-purpose prepaid category. Network Advisors include among others, The JLC Group, whose principal and securities industry veteran Jay Berkman has helped “connect the tag line to the bottom line” for various fintech platforms during the past two decades, including the corporate bond market’s BondNet Systems, OEMS operator OMEX Systems, insurance claims receivables management firm ViaNovus Capital, SROcalendar, the provider of “Compliance Officer-In-A-Box” solutions and KeyID, the secure messaging platform for the banking industry.

“As companies come to us, we can reach back out into the industry to these senior resources in our network and ask them about the space, the people, the product and more,” said DeSena, who headed REDI in 2000-2006, when the global multi-asset trading system was owned by Goldman Sachs.

For the full story from MarketsMedia.com, please click here

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Frmr NYSE Capo Niederauer Backs Bitcoin-based ‘smart securities’ startup Symbiont

Tech Talk: Bitcoin’s Distributed Ledgers: A FinTech Innovation..

MarketsMuse Trading Technology/FinTech department profiles Wall Street’s rapid embracement of the tools that power Bitcoin with a look at Symbiont, a company that aspires to disrupt the capital markets process.

Distributed ledgers, the technology behind the Bitcoin blockchain, can be used to issue, trade and process an array of financial instruments on a single, global, decentralized peer-to-peer financial network. And guess what, Symbiont, a startup that’s backed by several high-powered Wall Street figures, has established a platform for so-called smart securities, or financial assets that are programmable versions of traditional securities, using the distributed ledger.

Early investors include Duncan Niederauer, former CEO of NYSE Euronext, and Matt Andresen, founder of the Island ECN. “Symbiont is bridging the gap between Wall Street and the emerging blockchain ecosystem,” said Niederauer, managing member of 555 Capital and a member of the Symbiont Board of Directors.”It’s an exciting, timely and much-needed development for the long-term health of the markets.”

Neil DeSena, Senahill Partners
Neil DeSena, Senahill Partners

SenaHill Partners, the recently-established fintech merchant bank led by former Goldman Sachs trading tech honcho Neil DeSena and former Citigroup tech titan Justin Brownhill will serve as Symbiont’s business development agent. “SenaHill Partners is focused on fintech companies, and specifically on assisting a transition from analog-based financial services into technology-based financial services,” Smith said. “All of our access into the Street comes through SenaHill, so SenaHill is an important part of the Symbiont story.” SenaHill Partners also served as merchant bank and deal advisor to Livevol, the provider of equity and index options technology and market data services. During the first week of June, Livevol entered into a definitive agreement to be acquired by options exchange CBOE Holdings, Inc.

“The real value of this new technology is in the underlying protocol, the distributed nature of the Bitcoin blockchain, and the immutable nature of its ledger,” says Symbiont CEO Mark Smith. The distributed ledger is “a way to create new securities that could solve some of the problems that existed in the more opaque, less transparent, less liquid markets,” Smith said.

“We have launched Symbiont to create a generic platform that can operate on multiple types of cryptographically protected distributed ledgers to create what we are trade marking Smart Securities,” said Smith. “It’s a digital security that can be programmed with all the terms and conditions of a financial instrument. Once issued on a block chain, it can act autonomously to execute and extract terms and corporate actions without any human intervention.”

MarketsMuse sends a shout-out and thumbs up to June 18 reporting of this story by MarketsMedia.com