Overview
Capitalab is a division within BGC Brokers L.P. founded in 2015 by Gavin Jackson and David Bachelier. Headquartered in London, UK, Capitalab provides innovative financial services specializing in compression and optimization solutions for complex financial instruments, with a primary focus on derivatives markets. The company aims to enhance capital and operational efficiency in the global financial industry, particularly in the over-the-counter (OTC) derivatives sector.
Key Services and Offerings
Capitalab offers a comprehensive range of advanced solutions for market efficiency and risk management:
- Portfolio Compression: Facilitates multilateral options for capital market investors, achieving significant reductions in capital requirements and operational costs.
- Margin and Capital Optimization: Uses leading optimization algorithms to reduce capital and funding costs for both bilateral and cleared positions.
- Swaptioniser®: Delivers multilateral compression for OTC Rates, FX, and listed Equity options portfolios, achieving substantial notional compressions in options.
- NDF Match: Provides advanced matching solutions to mitigate Non-Deliverable Forward (NDF) fixing risk, crucial for FX settlement.
Financials and Market Position
- Revenue: Approximately $6.3 million
- Employees: Around 19
- Awards and Recognition: Winner of the 2021 Risk.net OTC Infrastructure Service of the Year and multiple GlobalCapital awards.
Capitalab operates primarily within Europe, the Middle East, and Africa, maintaining a competitive edge through its advanced financial technology and its affiliation with BGC Partners, a renowned global brokerage and technology firm.
Leadership
- Gavin Jackson, Co-Founder & CEO: With extensive experience from BNP Paribas, Morgan Stanley, and Citi, Jackson drives innovation in derivatives optimization.
- Sam Bussey, Global Head of NDF & FX Reset Risk Management: Bringing over 35 years of financial services experience, Sam contributes significantly to the establishment of Capitalab's NDF Match service.
Innovation and Industry Impact
Capitalab's technological advancements in risk management offer increased capital and operational efficiency to the global derivatives markets. The company provides tailored solutions for counterparty risk reduction and margin optimization, playing a critical role in market stability and growth, especially with regulatory changes like the transition from LIBOR to SOFR for swaptions.
Tailored Solutions and Partnerships
Capitalab offers tailored services to meet the diverse needs of clients, ranging from broker-dealer banks to buy-side clients adapting to regulatory changes. Collaborating with the broader derivatives industry, Capitalab fosters sustainable growth and resilience.
Recent Developments
Capitalab recently launched the "Capitalab FX, with CLS" service for FX forwards compression. It has also transitioned 10,000 LIBOR swaptions to SOFR, simplifying the complexities of derivative management. The company is expanding its service offerings across OTC interest rate options, FX options, and notional compression cycles, which have exceeded $700 billion in recent months.
Competitor Analysis
Key Competitors
- TriOptima: Offers post-trade infrastructure and risk management services in the OTC derivatives space.
- Capitolis: Provides capital marketplace solutions and portfolio optimization services, supported by major venture capital firms.
- ICE Link: Specializes in middleware solutions for credit default swaps (CDS) that support regulatory clearing requirements.
Strategic Insights
Capitalab presents engagement opportunities for stakeholders interested in financial technology innovation. Its strong collaboration with global partners such as Eurex, and its parent association with BGC Partners, offer a platform for continued growth and market leadership. These factors make Capitalab a compelling partner for firms aspiring to advance capital efficiency and regulatory compliance in derivatives trading.
