AFTAs 2017: Most Innovative Third-Party Technology Vendor—Front Office—Overbond

2017 AFTAs

Front-office technology platforms might be working hard to address demands for greater holistic functionality, but when there’s a specific challenge to tackle—the digitization of the corporate and government bond market, for example—precise solutions are needed. The winner of this year’s most innovative third-party technology vendor (front office) category has only been operational since 2015, but Toronto-based Overbond has staked its claim at the head of the pack thanks to a blend of its proprietary technology and a well-defined strategy.

“Primary bond issuance is what I would call the last bastion of the capital markets to remain completely manual,” says Vuk Magdelinic, CEO of Overbond. “We have come to 2017 and the time is definitely right for change, given how much the capital markets have changed, specifically in the secondary market where liquidity of traded bonds is a great problem and where price discovery is being propped up by all sorts of technology tools, but the supply isn’t there.”

The ethos driving Overbond’s end-to-end platform is establishing connectivity between bond issuers and investors, where the former need confident pricing coming to market and the latter require greater supply of primary bonds. The platform’s core is the corporate bond intelligence (COBI) suite of algorithms, which operate at pricing, propensity to issue (a dashboard of issuers that are likely to come to market), and matching levels, the idea being to combat “information overload” for asset managers by digitzing and digesting all necessary data algorithmically to arrive at the executable, or at least actionable, trade idea.

The platform’s functionality was extended last year through the rollout of OverbondX in January 2017, a deal-execution module that allows users to digitally execute both private placement and public offerings, thus speeding up the process of executing new issues transactions from origination to launch. This was followed later in the year through the launch of COBI Opportunity, which provides a matchmaking algorithm that incorporates market signals between investors and issuers to provide investment ideas for new bond issues.

Having accrued a 40 percent market share in its native Canada in the two years since its founding, Overbond expanded into the US market in September, furthering its buy-side client base and onboarding new corporate and treasurer bond issuers. The vendor is also mulling a European launch during the back end of 2018. 

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