02 Dec Coefficient Partners with Allvue to Provide Integrated Live Trading Data
By Kristen Haunss. Reposted from Loan Connector/Refinitiv LPC on 12/1/22
NEW YORK, Dec 1 (LPC) – Coefficient Markets, a technology company focused on the syndicated loan market, has partnered with Allvue Systems to provide live trading data directly to investment firms’ portfolio management systems.
With the partnership, live leveraged loan trading price runs from participating investment banks will be integrated into an investment firm’s portfolio management system and daily workflow on the Allvue platform. Historically clients have had to rely on days-old loan prices or view live data outside the system. Firms that look at older prices in the system would most likely not be able to make trades at those same levels when they reached out to an investment bank about a transaction.
The integration may lead to higher trading volume and better-quality trade selection while saving time for investors.
The first runs are expected to be sent to the system, which is utilized by some of the largest US Collateralized Loan Obligation managers, before the end of the year.
“I think that delivering market data directly to portfolio management systems opens up all kinds of possibilities for more active portfolio management not previously feasible in the loan market,” said Brian Callahan, founder of Coefficient. “I genuinely believe loan market trading volumes can be a multiple of what they are today with end-to-end connectivity sourced directly from the origin of the data itself.”
Companies rely on the US$1.4trn loan market to fund mergers and acquisitions, and support operations. There is no universally used trading platform or management system for the US loan market, and traders and investors must manually update and share loan prices. This partnership helps to alleviate some of that manual burden by streamlining the process to make it easier to see live prices of loan holdings.
There was more than US$70bn of loan trade volume in October, the biggest monthly tally since June when there was US$72.9bn of activity, according to data from the loan trade organization the Loan Syndications and Trading Association.
Loan volume has slowed this year amid rising inflation and rate hikes, with quarterly institutional issuance of just US$49.47bn in the third quarter compared to US$170.79bn during the same three months of 2021, according to Refinitiv LPC data.
Callahan, previously head of US par loan trading and electronic initiatives for credit at Bank of America, founded Coefficient in 2021. It develops technology and workflow solutions in partnership with London-based technology firm Etrading Software.
Earlier this year, it released its EPIC trading software that allows banks to send trading runs straight to a client’s Bloomberg Terminal, as well as individual axes to customers based on their current portfolio.
Three banks in the US have signed onto the Coefficient system, with others expected to join soon.
Banks will continue to use Coefficient to send data to investors’ Bloomberg Terminals and have the option to send it through to the Allvue system.
The first dealer is expected to send runs to Allvue in December, with more functionality available early next year.
Allvue was formed following the merger of Black Mountain Systems and AltaReturn, a provider of cloud-based technology for the private capital and family office market, after they were both acquired by Vista Equity Partners in 2019.
“Our integrated partnership with Coefficient will provide access to actionable sell-side liquidity information through a fully functional OMS tailored to CLO managers and loan traders,” Yuriy Shterk, chief product officer at Allvue, said in an emailed statement. “We are excited to be a part of a revolutionary offering that will lead to a stronger and more active loan market with greater liquidity and better pricing built in.”
Coefficient recently hired Conrad Chen as its chief business officer, who will further develop the firm’s product offerings. Chen previously served as a portfolio manager for leveraged loans at investment firm Crescent Capital Group.
“When I saw what Coefficient had built, it was clear to me that this is the solution the buyside has been searching for, a way to connect to the sellside more effectively so that we can trade when we want to, not when we have to,” Chen said.