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New York, 7 June, 2017 –
International Finance Corporation (“IFC”), a member of the World Bank Group, and LMRKTS are pleased to announce an equity investment by IFC in LMRKTS to help expand LRMKTS into the emerging markets. IFC joins lead-investor Motive Partners, a next generation private investment firm focusing on technology-enabled companies that power the financial services industry, in this round.
Founded in 2012, LMRKTS provides a compression service which helps commercial and investment banks reduce exposure to each other thereby minimizing counterparty risk and leverage costs. The company balances participants’ counterparty limits and their unique risk management objectives with a structured methodology that delivers mutually beneficial results. By reducing risk in local currencies and lowering the possible impact of one party’s failure on others, LMRKTS can foster liquidity and investment in emerging-markets countries.
As LMRKTS delivers as a service with analytics that support existing and new infrastructure, it provides both scale and seamless processing to banks worldwide. After years of testing, LMRKTS launched in late 2016, and has compressed over US$2 trillion of notional equivalent in foreign exchange derivatives.
“Globally, banks need to improve capital efficiency in the face of increasing regulatory pressure. LMRKTS applies a unique financial technology which, through eliminating redundant bilateral and multilateral counterparty exposures, helps banks to improve their risk profile while saving capital which can then be used to lend to small-and-medium sized business among others. Their solution can have an even bigger impact for emerging markets banks where regulatory pressure and increased capital needs are compounded by the illiquidity of local markets”, said Andi Dervishi, global head of Fintech Investments at IFC.
“IFC’s investment recognizes LMRKTS’ ability to reduce systematic risk and is aligned with our ambition to foster stronger and safer capital markets around the world”, said Lucio Biase, chief executive of LMRKTS. “Emerging market exposures are the main driver of the standard initial margin model for foreign exchange, and we welcome IFC’s support and commitment to LMRKTS growth and success in this segment.”
“With a core group of ten of the largest investment banks signed as customers, we hope this partnership and investment with the IFC will help us grow beyond the New York Fed list of Primary Dealers and into other asset classes such as rates and into emerging market banks”, added Mr. Biase.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY16, we delivered a record $19 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity. For more information, visit
www.ifc.org
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About LMRKTS LLC
LMRKTS offers a more modern version of portfolio compression – a means for sellside, buyside, central counterparties and end-users to optimize their counterparty risk in any market or payment system without changing their market risk. Whether through the addition of new positions or the terminations of existing exposures, LMRKTS takes participants’ total gross counterparty credit risk down to a level nearer their net market risk, often shifting exposures to more creditworthy parties. For more information, visit
www.lmrkts.com
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