Like penicillin, DealVector was born by random chance. Michael Manning went to Princeton and became a Silicon Valley entrepreneur, while David Jefferds went there and became a dealer in structured credit. Decades later, the two found themselves on the same ski lift, struck up a conversation, and the seed that would grow into DealVector was planted.
The BST Awards judges deemed it the best new company/product on the market because the need it serves was a niche overdue to be filled. As it stands, the beneficial owners of illiquid alternative assets have no easy and secure way to connect to, and communicate with, potential counterparties. Holders of the same paper in a collateralized loan obligation, mortgage-backed security, and other structured credit products may want to address governance issues, voting events, restructurings and recapitalizations, asset sourcing, and price benchmarking. Many actions require a plurality of note holders to move forward. But the means of finding out who else is in a deal are limited to a few inefficient or expensive options.
DealVector, launched in April as “LinkedIn for the buy side,” is an electronic search and communication tool for all participants in a deal. Members load their affiliated deal list and are alerted to matches, whereupon they can message each other through anonymous numerical IDs. They may discuss voting on upcoming consent solicitation, ask advice about managers with whom they’re entering a deal, or the parameters of buying and selling notes. If they’re comfortable enough, they reveal their identity and talk serious business.
Member identity is verified through corporate email addresses and deal affiliation is verified through observation of an account statement. The need for cold calling, and the accompanying information leakage, is eliminated.
Also available is the Bids & Offers feature, a price-discovery service that provides visibility into market demand. DealVector’s matching engine connects members who mutually improve each other’s market, narrowing spreads.
Cairn Capital, Pine River Capital, Eton Park, and Perella Weinberg are among DealVector’s early buy-side clients. Southport Asset Management chairman David DeLo, who describes it as “the answer to my prayers,” says it has saved one client millions of dollars by allowing it to unload trust-preferred securities ahead of a restructure.
Whether this company thrives in the long run is unknown. But its reason for existence, at least, should be here to stay.
“We are extremely gratified to be recognized by Buy-Side Technology as the best buy-side newcomer, in what was one of the most competitive awards categories this year. Past winners of this category include companies such as Knight Direct, Advise Technologies and Data Explorers, which have gone on to have a major impact in the market, and we are honored to be included in such a group.”
—Michael Manning, CEO and co-founder, DealVector
Adam Sussman joins Anthony Malakian to talk about Liquidnet's acquisition of OTAS, machine learning and AI, and what the buy side wants from analytics platforms.Subscribe to Weekly Wrap emails