IHS Markit’s thinkFolio partners with start-up fixed income solution provider Wave Labs

The partnership will see IHS Markit benefit from trading technology at Wave Labs, while addressing portfolio managers’ requirements from a liquidity and price discovery angle.

IHS Markit’s thinkFolio has announced a partnership with Wave Labs to help expedite price discovery and offer an alternative to incumbent execution management systems (EMS) in the fixed income market.

Established by former Nordea global head of trading, Miles Kumaresan, Wave Labs has created fixed income tools that are said to deliver a functional window through a trader’s perspective.

The start-up claims to challenge the void left by established EMS vendors that aim to keep up with advancing technology that has a high bar for success for each asset class.

Wave Labs’ eLiSA (Electronic Liquidity Seeking Application) is an EMS aiming “to get rid of tedious tasks”.

In an interview with The TRADE in August 2020, Kumaresan explained how Wave Labs is looking to revolutionise institutional bond trading. eLiSA offers a suite of tools for high-touch traders for visually identifying liquidity spots and price differences, as well as a data mining tool to score, rank and make broker recommendations.

Kumaresan believes a ‘black-box’ spurting out recommendations doesn’t suffice anymore. His system’s broker recommendations include a summary of why the broker is recommended, with the benefits of the recommended broker visually highlighted in comparison to all other brokers.

“Wave Labs’ success lies in the unconventional way in which we went about gaining an edge in fixed-income trading. It started with defining a workflow that is both liquidity discovery-centric and uniquely fixed-income in focus. With this at its foundation, Wave Labs set out to create a range of tools that supported the different pieces of the trading puzzle,” said Kumaresan, CEO and founder of Wave Labs.

“These components collectively form a fluid workflow that assists traders at every step of the trading lifecycle. A trader decides when and what he or she wants to use, depending on the task at hand.”

A recent report by Greenwich Associates found that every single basis point in IG spreads can equal $1 billion in savings for end investors, and for less liquid assets the increase is greater.

IHS Markit’s thinkFolio and eLiSA bring mutual clients streamlined workflows by leveraging cloud-based APIs and one another’s functional strengths across the investment lifecycle. Through the extension of thinkFolio’s suite of interoperable alliances, clients have access to a suite of options to utilise across their operating models – from portfolio construction and pre-trade risk analytics to execution and post-trade performance attribution.

“The plug-and-play integration of thinkFolio with eLiSA offers our end-users a smooth workflow between two complementary technologies that are specialists in their respective fields. While eLiSA is primarily a trading technology, it also seeks to address portfolio managers’ requirements from a liquidity and price discovery angle,” said Brett Schechterman, global head of thinkFolio at IHS Markit.

“These intraday market insights go hand-in-hand with thinkFolio’s bottom-up analytics, expose monitoring flexibility and sophisticated portfolio modelling capabilities. When married, as has been our objective with similar alliances focused on other asset classes, these technologies provide a cohesive workflow that enhances front-office productivity and perpetually enriches communication between portfolio managers and the trading desk.”