Our free FinTech update also features items from Morningstar, Gresham Technologies, RJO, and Refinitiv.
CloudMargin Appoints Stuart Connolly as Next CEO
A former Group CEO of TriOptima Stuart Connolly has been named as the new CEO of CloudMargin, a London-based vendor of cloud-based collateral and margin management solutions, replacing Steve Husk, who left CloudMargin.
The CloudMargin board of directors approved Connolly’s appointment and he has taken on the role, officials say. Before CloudMargin, Connolly was Group CEO of TriOptima and a former managing director at Goldman Sachs.
Connolly joined TriOptima AB in late 2016, and served as its Group CEO from February 2017 to January 2019, overseeing the global trading, capital and operational risk management services across over-the-counter (OTC) asset classes, officials say.
At Goldman Sachs, which Connolly joined in 1998, he most recently served as managing director of the securities division and head of EMEA derivatives clearing services FXPB. He also held other functions from 2010 to 2016, officials add. He was head of derivatives prime brokerage at the firm from 2005 to 2010, and ran interest rates and foreign exchange (FX) products.
“Connolly has participated in many internal and external industry committees during a period of significant regulatory reform, helping execute the transition from a predominantly bilateral OTC market to a multi-faceted market across many different models of centrally cleared bilateral and agency style platforms,” according to CloudMargin officials.
Husk “played an active part in the board selection of the new chief executive,” according to CloudMargin.
“Husk, 63, joined CloudMargin when the firm was a start-up, operating with a small handful of clients,” according to CloudMargin. “During his tenure, he recruited a deep management team and articulated a vision and strategy which has led to a client base of nearly 50 direct clients and 85 underlying entities using the platform, ranging from small to mid-sized buy-side firms, to Tier 1 global investment banks. CloudMargin was named one of the top fintech start-ups of 2018.”
Initially, Husk served as CloudMargin’s executive chairman in October 2015 “before transitioning in the spring of 2016 into the role of CEO … Under his leadership, CloudMargin has championed the case of cloud-based solutions for post-trade processing in financial markets and achieved annual recurring revenue growth of over 100 percent,” according to CloudMargin.
“While leaving CloudMargin wasn’t an easy decision, much of the work I came in to do is complete, and I am proud that I can leave the firm on such a strong footing,” Husk says in a statement.
Morningstar Acquires DBRS for $699 Million
Morningstar, Inc., a major provider of investment research and services, reports that it has entered into a definitive agreement to acquire DBRS, which the statement characterizes as the world’s fourth-largest credit ratings agency. The purchase price is $669 million, according to the firms’ statement.
The combination of DBRS and Morningstar’s U.S. credit ratings business will “expand global asset class coverage and provide an enhanced platform for providing investors with leading fixed-income analysis and research,” the companies say in their statement.
“The chance to empower investors with the independent research and opinions they need across a multitude of securities first drove our decision to enter the credit ratings business,” Morningstar CEO Kunal Kapoor says in a prepared statement.
“DBRS and Morningstar share research-centric cultures committed to rigor and independence,” Kapoor says. “Together, we believe we can elevate the industry with the world’s first fintech ratings agency backed by state-of-the-art models, modern technology, and expert research teams that issuers and investors can count on to deliver transparent and independent ratings.”
DBRS reported revenue of $167 million for the fiscal year ended Nov. 30, 2018, and the company notes that, on a preliminary pro forma basis, “if Morningstar owned DBRS as of Dec. 31, 2018, revenue from credit ratings would have represented approximately 17% of Morningstar’s total revenue.”
Morningstar says that it intends to fund the DBRS transaction with a “mix of cash and debt, which will include the placement of a new credit facility at closing. The transaction is expected to be accretive to net income per share in the first fiscal year after completion with an estimated closing in the third quarter of 2019, subject to regulatory approval and customary closing conditions.”
Lazard Frères & Co. LLC served as exclusive financial advisor to DBRS, and Wachtell, Lipton, Rosen & Katz served as legal counsel to DBRS. Winston & Strawn LLP served as legal counsel to Morningstar.
Clearinghouse Signs $1.5 M Contract with Gresham Technologies
Reconciliation vendor Gresham Technologies reports that it has signed a five-year contract, valued at £1.2 million ($1,521,041) with an undisclosed clearinghouse that wants to improve the transparency and accuracy of its offerings.
The deal is Gresham’s third contract this year valued at more than £1 million, vendor officials say.
The clearinghouse will be deploying Gresham’s Clareti platform, which encompasses the Clareti Transaction Control and Clareti Adaptors. The adaptors will replace “fragmented legacy tools and manually intensive reconciliation and control processes with a new enterprise-wide solution to be used across the firm’s international clearing operations,” according to the vendor.
The hope is that the new system will improve “the client’s ability to provide risk management and central counterparty services to market participants by improving transparency and accuracy alongside increased control of its data spread across asset classes, business units and functions,” according to Gresham.
The actual identity of the clearinghouse was not disclosed by the vendor.
RJO Promotes Three to Senior Management Posts
Chicago-based R.J. O’Brien & Associates (RJO), which describes itself as the oldest and largest independent futures brokerage and clearing firm in the United States, reports three senior management promotions. They are:
- Daniel Staniford has been promoted to chief sales officer;
- Terry Gilhooly has been promoted to chief operating officer (COO), North America;
- And Karen Northup has been promoted to global solutions o
Founded in 1914, RJO currently tallies more than 80,000 institutional, commercial and individual clients around the world, in addition to a network of approximately 400 introducing brokers.
Refinitiv Acquires AlphaDesk
Refinitiv reports that it has signed a definitive agreement to acquire cloud-based AlphaDesk in a bid to expand Refinitiv’s buy-side portfolio management and trading capabilities, the vendor says in a statement.
Currently, Eikon, which Refinitiv says is its flagship financial platform, offers pre-trade data and analytics. AlphaDesk will add a multi-asset class and multi-currency order management system (OMS) platform with flexible workflows, adaptable to the differing needs of individual buy-side traders and asset managers, officials say in a statement.
AlphaDesk software combines capabilities for managing data and integrating with other systems involved in the buy-side investment workflow, per the statement, which also notes that the “combination benefits both traders and traditional buy-side portfolio managers, given their converging roles.”
Refinitiv expects the acquisition to close in the second quarter of the year.