Neptune – Looking back and Looking forward
It’s been a good year for all of us at Neptune.
Despite ongoing political and economic disquiet in the wider world (not to mention ever-evolving regulation within our industry), we’ve kept our heads down and worked hard to grow the business by solving problems for our clients, particularly around the distribution of real-time bond axes.
As we approach the end of an exciting year, today we’re taking a look back at what we’ve done well and a look forward at what we want to do better.
What we’re proud to have done in 2017
The most pleasing aspect of our performance in 2017 is reflected by the growth in the number of clients we now have on the buy-side. We’ve grown by 90% and our client roster now totals over 50 firms with approximately $17 trillion Assets Under Management.
This has been very encouraging given Neptune was only incorporated in July 2016. Clearly our product is resonating, delivering results and being adopted industry-wide. Further, we have over 30 prospects in the pipeline reviewing documentation and we’ll be looking to add them to our stable of clients in the first half of 2018.
Our sell-side support has been strong, too. Here, we’ve grown 50%, adding 8 banks to the 16 we were working with, taking our total to 24 live, with the likes of BAML, Citi and Deutsche Bank joining our roster. Our 25th bank is on-board and set to go live in Q1, 2018, and we have another 5 reviewing documentation. You can find a full list of our 25 sell-side clients on our home page
So our client uptake has been strong and we’re very proud of the relationships we’re building. The fact that our clients – both buy side and sell side – are joining and staying with us is thanks in no small part to our improved technological offering.
Connectivity has played a key part in our growth. We’ve invested a lot of time and capital into building an enhanced front-end/GUI, which now includes best-in-class search and analytics tools, improved integration with clients’ proprietary systems, and connectivity to an expanding range of order and execution management systems, such as FlexTrade, Algomi ALFA and TradingScreen. We have a burgeoning pipeline of future OMS/EMS partners in this space, too. We’ve also embedded Symphony, the fast-growing chat tool, within our applications.
By adding more clients and connecting them efficiently, we’ve seen huge growth in the amount of data being shared via the Neptune platform. In 2017, we’ve grown from $80bn daily gross notional from 18,000 axes to $170bn notional from 37,000 axes. USD has been a large part of this growth, going from 20% of axes at the start of 2017 to 51% currently. This is largely thanks to BAML, Citi, JPMorgan and Morgan Stanley adding their New York trading desks.
As the amount of data being shared has grown, our asset class offering has expanded, too. Whilst Investment Grade Credit remains our core strength, we’ve seen significant growth in High Yield, Emerging Markets and Rates, and we expect this to continue into 2018.
So, whilst 2017 has been a very good year for Neptune, we’re not resting on our laurels.
What we’re looking to do in 2018
As Central Banks move away from loose monetary policy, with spreads expected to widen, our primary focus for the coming 12 months will be on adding more information and connectivity whilst creating more efficiency for our clients. For example, we want to add the ability for clients to send data on buy-side axes to selected bank counterparts. As part of greater attribution of the Neptune data, we’re also exploring how we might be able to add potential links to execution (including bilateral messaging), whilst remaining committed to our core proposition and not becoming a trading venue.
We’re also looking to expand the number of asset classes we offer, creating more exposure and generating more data in HY, EM and Rates (Government, Covered and SSA). We’ve made good headway in these areas in 2017, but we’re keen to do more. Also, look out for ‘Apollo’, a project we’re working on that will, in time, offer API-based streaming of two-way prices, giving our clients more data (for trading, investment decisions, best executions, TCA), more connectivity, and more solutions that are cost effective.
Excitingly, our client pipeline for 2018 looks very strong, with dealers – of all shapes and sizes – lining up to take advantage of our ever-growing footprint in the UK, Europe and the US. As mentioned above, buy-side clients are showing significant interest, too. More clients on the platform means more data for all of our users, so as we grow the community, we will also be improving the quality of the product and the service that we are able to provide.
2017 has been a great year for Neptune. But we’re confident that 2018 can be even better.
Wishing you a very Merry Christmas and a Happy New Year.
Byron
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