Acquisition of Cadis the


increasing


The acquisition of Cadis came in May 2012 and the move reflected


data-related challenges


facing


financial institutions as they sought to reduce risk and comply with new regulations, said Markit president, Kevin Gould. Markit had been considering and looking for an EDM solution for the previous couple of years and Cadis was felt to be the ‘best in class’ provider in this space, he said. ‘It is a natural fit for us as a data provider.’ Cadis had around 60 staff at the time of the deal, following


its foundation in 2007. While Markit would seek to sell Cadis’ EDM platform alongside its own solutions, the acquired company was expected to remain as a separate business unit and the products of the two companies would continue to be sold separately. At the same time, Gould foresaw the Cadis solution becoming a facilitator for Markit’s offerings. One use was expected to be to manage the population of data for its risk suite, Markit Analytics, from multiple sources. Markit was starting to build some data management capabilities, said Gould, but Cadis had a ‘very efficient, slick piece of installed software that makes it much easier than us building out’. Prior to this, Markit had partnerships with EDM providers, including Cadis rival, Goldensource. ‘In many ways, data management and the problems


associated with it define many of the challenges facing the financial industry today,’ said Gould. The volumes, types and sources of data were increasing, so too the resultant task of assimilating and making sense of it, he said. Consistency and auditability were also important, with a push to have analysts and back office using the same sources. There were a number of common customers at the time


of the deal, with feedback gained from here. From Cadis’ perspective, Gould believed that it had reached a size at which it was likely to struggle to fulfil market demand so it made sense to become part of a global company with a large distribution capability and 3000 customers. The financial details of the deal were not released but Cadis was a profitable company, he added.


User experiences


An important, high-profile customer of the EDM suite of late has been UBS, with Markit working here alongside iGate Corporation. The project is centred on a single security instrument reference data master for all areas of the Swiss bank, aside from asset management, with 14 legacy systems expected to be replaced by the end. The platform will be hosted in India by iGate and underpinned by the Cadis-derived software. The aim is to use it as the basis for offering a hosted solution to other financial institutions.


The deal was signed in the second half of 2013 and by October 2014 a proof of concept had been completed,


Since then, Markit appears to have done well in the EDM space on the coat-tails of compliance demands, with Markit claiming 117 clients by October 2014. Around half of these were in the US. Approximately 45 per cent were in Europe but it had been making headway in Asia Pacific as well (reflected in the build up of a Singapore-based professional services team for EDM during 2014). There is a relatively small number of partners that work with Markit on EDM projects, including Citisoft in the US (such as at US investment firm, MacKay Shields, in 2012-13) and UK-based firms, Pentagon Consulting and Axxsys Consulting. There is an ‘EDM academy’ for training Markit’s own staff, customers and partners. There are client advisory groups which, in 2014, convened in Edinburgh, London, Amsterdam, Toronto, New York, Boston and Chicago, with Singapore planned for 2015. A standard EDM project is touted as likely to take three to five months for a first phase cutover and the suite comes with a range of adaptors and screens. Among the customers are regulators, central banks,


insurers, asset managers and hedge funds, with a growing number of buy-side clients. Markit is keen to emphasise an independent approach to market data provision when it comes to the EDM sector, with ‘Chinese walls’ in this part of the Markit group. The Markit


Analytics suite, which complements the


EDM offering, comprises a range of applications across counterparty credit risk, market risk, credit value adjustment, and integrated resource management, plus an initial margin calculator.


Markit acquired DTCC’s LoanServ position reconciliation


technology assets. US-based Depository Trust and Clearing Corporation (DTCC) launched its LoanServ offering – a platform that gives syndicated loan agents and lenders a vital place to gather – back in 2008. Its major competitor is Euroclear, with its LoanReach service. In May 2017, IHS Markit launched its new Outreach360 platform, to address MiFID II regulatory rules such as documentation management, regulatory outreach for KYC and tax as well as repapering between counterparties.


using ‘real data and real asset classes’, said Markit’s COO for enterprise software, Paul McPhater. The project was ‘tracking very well’ and had ‘very senior oversight from all three companies’, he said. It involves large volumes of data so one of the ongoing tasks was to test the performance and resilience. There will be a phased series of cutovers as different systems are retired within this multi-year project. In terms of offering this as a more generic platform for others, McPhater believed that there was support for this from UBS itself, which was keen for it to become a shared solution. UBS was already an EDM customer of Markit for the asset management area. The project was the first time that Markit had worked with iGate. There was increasing demand for managed services in the


Risk Management Systems & Suppliers Report | www.ibsintelligence.com 85


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