Quantile Technologies (Quantile), a provider of portfolio optimisation services for the global financial services market, has secured a USD51 million (GBP38 million) minority investment from Spectrum Equity, a growth equity firm focused on internet-enabled software and information services companies. 

The investment will accelerate the next phase of Quantile’s growth as it develops new services and expands into new markets to better serve its clients. Spectrum is the first institutional investor to back Quantile’s experienced founding team.

At the core of Quantile’s platform is a powerful optimisation engine providing advanced compression and risk rebalancing services to banks, hedge funds and other financial institutions engaging in OTC derivative transactions. Through Quantile’s services, clients can reduce counterparty risk and gross notional, release capital and improve returns. Quantile’s compression service has eliminated more than USD230 trillion of gross notional to date and its optimisation service reduces billions of dollars of initial margin each month across asset classes.

Quantile, formed in 2015, was founded and is led by a team of industry experts with significant experience in risk management, quantitative analysis and trading technology.

“We are committed to providing our clients with market-leading services to allow them to continuously optimise their derivative portfolios to maximise returns and to efficiently meet regulatory capital requirements,” says Andrew Williams, co-founder and CEO of Quantile. “We are very pleased to partner with Spectrum Equity and leverage the team’s deep domain expertise in scaling FinTech and risk technology companies to further develop our industry leading solutions.”

Mike Farrell, Managing Director at Spectrum Equity, says: “Quantile’s risk management and optimisation technology has proven to deliver significant value for its clients. We are pleased to work alongside the Quantile team in the next phase of growth and see tremendous potential for the company to fundamentally transform the derivatives market as the adoption of sophisticated multilateral risk management techniques accelerate.”

Quantile has a broad client base which includes the world’s largest banks and buy-side firms. Quantile’s advanced algorithms make it easy for clients to target and reduce certain risk characteristics, such as gross notional or initial margin requirements, without changing the overall risk profile or valuation of their portfolio. As more market participants adopt Quantile’s services, the optimisation process becomes more efficient, creating strong network effects that benefit all participants.

Stephen O’Connor, co-founder and Chairman of Quantile, says “We are grateful that the major derivatives market participants have chosen to partner with us. As we look forward to the next phase of our growth, the new relationship with Spectrum will enable Quantile to work with those clients to drive further risk management innovation in the financial services industry.”

“Quantile is at the forefront of risk optimisation for derivative portfolios, enabling clients to not only rebalance and reduce risk, but also increase their competitiveness and operating efficiency. They are making the financial system safer, and we look forward to supporting Quantile’s mission-driven and product-led growth,” says Parag Khandelwal, Principal at Spectrum Equity.

In conjunction with Spectrum’s investment, Mike Farrell from Spectrum Equity will join Quantile’s Board of Directors.

Financial terms of the transaction have not been disclosed.

Source: Private Equity Wire