From Idea to Investor Access: What It Takes To Innovate in the Primary Markets (Part Three)

Herb Werth, Managing Director of Buy Side Product Strategy and Marketing, talks about how the buy side and sell side have come together to change the way deals get done.

In January, Ipreo launched Investor Accessan industry-led initiative that allows institutional investors to submit orders directly, through our system, to the sell-side syndicate banks on fixed-income new issues. The program is the result of an ongoing development process that featured collaboration from both the buy-side and sell-side communities with whom Ipreo works every day.

Now that we are in the second quarter of 2017, and momentum continues to grow on Investor Access as more and more firms use the platform to execute deals, the Ipreo Blog sat down with Herb Werth, Managing Director of Buy Side Product Strategy and Marketing, to discuss why Investor Access was necessary, how things are going, and what’s next, in this three-part series. (Read the full interview.)

PART THREE: Continued primary market innovation

Blog: What’s next for the Investor Access initiative?

HW: A key objective right now is to continue growing the Investor Access community and increase deal flow. A key tenet of our development process has been listening to our customers, and this will continue to guide the platform’s direction. There’s an opportunity for folks on both the buy and sell side to get involved with Investor Access, to provide feedback into the ongoing innovation process with the other members of the community, and make sure that what we’re developing benefits their own workflow.

Blog: Has that feedback clued you into other pain points?

HW: We’ve heard from our customers that there are some buy-side-specific tools that would be useful to fill some gaps that exist at a lot of firms, one of which is to improve the workflow between PMs at a firm and the trading desk, particularly with respect to new issues. This is a way for PMs to be informed of the deals – along with color from their traders – to indicate their interest to participate in those deals, for the trader to watch their order book aggregate in real time and to be able to reflect that to the street. There are also provisions for other people at the firms such as credit analysts or operations folks to be involved in that process where appropriate.

Blog: Which just furthers the theme of collaboration!

HW: Yes, definitely – we’re extending the concept of collaborating on a deal to not only involve the trader and sales/syndicate, but now to further help with those processes that are internal to a buy-side firm as well. The other thing that we’re somewhat uniquely positioned to do is easily provide a consolidated audit trail of everything related to the new-issue process from deal communication to the actual terms and conditions of the deal. This includes: messages that come from the banks, any internal commentary that’s captured on the deal by the PMs or traders, the actual orders that are submitted and each step along that process (including order modification or cancellation), and finally, the allocation and pricing of the new issue. All of that is captured in a single, consolidated audit trail that will be accessible through either a user interface that we could provide, or through an audit feed extracted and integrated into existing workflows for compliance.

Blog: Anything else?

HW: For decades, our core business has been around sell-side workflow and we’ve recognized the need to integrate with the systems and workflows that are specific to these banks. We’ve now built this bridge between the buy side and the sell side with Investor Access, and we’re leveraging our expertise in workflow solutions, bringing it to bear for the buy side in streamlining their processes as well.

Blog: How so?

HW: We are implementing a series of integration points which will do several things: they will allow investors to integrate new-issue terms and conditions data into their in-house systems, they will allow for the submission of orders and the receipt of allocations electronically using the FIX protocol, and they will allow audit trail data to be integrated into other internal systems. Those are things that our buy-side customers have specifically requested. Through our Integration Services, whether for terms and conditions or orders and allocations, we’re effectively providing access points for both in-house systems and third-party solutions (such as order management systems), to interface with our platform in order to allow for seamless workflow between the existing platform at a buy-side firm and our solutions.

Blog: And how about global expansion?

HW: Our existing businesses already have a strong global footprint – Ipreo serves clients in every major financial hub around the world today. Accordingly, the Investor Access platform was always built with global implementation in mind. We realize there are certain nuances to primary issuance in different parts of the world, but there is also a lot of commonality in workflows.

The ability for banks to publish deals to investors is deployed globally now. We initially launched the electronic order/allocation process in Europe, given the strong demand from the community there. We now have a great deal of interest from a number of banks and investors in Asia and are actively working to replicate the progress we were able to make in EMEA in that region. From a technical perspective, implementing Investor Access in new regions is not difficult; and following the success of the EMEA roll-out, the interest and momentum we’re seeing in other regions is exciting.

Read the full interview.