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A-Team Insight Blogs

Talking Intelligent Trading With Andrew Delaney: Can Colt Grow Into a Cap Markets Stallion?

Colt’s creation of a dedicated capital markets team that integrates its now wholly owned MarketPrizm unit with its own hosting and connectivity offerings – announced last week – is a perhaps overdue logical next step in its acquisition of MarketPrizm, which was spun out of the former Cicada Cos.

MarketPrizm became 100% owned by Colt a year ago, when the UK telecoms and data centre operator acquired the remaining 20% it didn’t already own from Nomura, which had found itself owning part of MarketPrizm through its involvement in Chi-X (MarketPrizm was originally acquired by Chi-X from Cicada to form part of its Chi-Tech technology services arm).

That’s all in the past. Looking forward, Colt – whose name is derived from City of London Telecommunications – has decided that MarketPrizm represents a strategic asset in its bid to address its core constituency and beyond.

According to Andy Young, who heads the capital markets specialist sales team under the new arrangement, based in London, the integration of MarketPrizm makes sense on a number of levels. First, it brings together MarketPrizm’s expertise in data feed handling and low-latency connectivity with Colt’s stability and scale – with obvious synergies for existing Colt clients large and small.

Second, it simplifies the client relationship aspect, replacing separate sales calls with a single point of contact. And finally, it allows for a single contract and service level agreement structure, again simplifying the ongoing client engagement.

Under the new structure, Colt will offer MarketPrizm services as part of a wider Capital Markets offering. Young says this will allow Colt to pitch to all levels within the capital markets segment, with MarketPrizm’s specialist low-latency kit pitched at focused, DIY-type high frequency trading shops, its market data solutions combined with Colt’s hosting and connectivity options for larger firms, and Colt’s post-trade capabilities – in the form of its Target2Securities participation – rounding out a full-service offering for major clients.

Colt believes its newly bolstered capital markets offerings will help firms address the swathe of new regulations that has changed the face of the capital markets sector. Market participants are increasingly focusing on their core business and working with technology partners that can provide the agility and scale required to access new markets and increase market share.

By combining its network and data centre footprint with the MarketPrizm market data and direct market access services, usually associated with niche players, Colt Capital Markets should be well-positioned to help customers access the continuously expanding number of market venues.

The new unit will be headed by Naz Dossa, vice president, capital markets, who takes on responsibility for market strategy and sales, and Jay Hibbin, vice president, capital markets services, who will be responsible for services, including product and operations.

Young says the new structure has instituted a more proactive approach to Colt’s capital markets offerings, with the development of a formal product roadmap that should see the release of new capabilities in the coming months. Complementing MarketPrizm’s traditional strength in equities, Colt sees new growth opportunities in foreign exchange and listed derivatives.

Young also says Colt will build on its strategy of using partner channels to push the newly integrated capital markets services out to market. He points to Colt’s relationship with Fidelity stablemate – pun intended – KVH of Japan, under which KVH offers Colt services in Asia. This will continue, particularly with the MarketPrizm brand, which is strong in Asia.

What’s most encouraging, Young sales, is the buy-in from senior management. He says the new structure has been endorsed at the very top of Colt, signalling the company’s commitment to what it sees as a strategy industry segment going forward.

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