Market data platform provider SOLVE Advisors acquires fintech Lumesis

BY SourceMedia | MUNICIPAL | 09/30/22 10:45 AM EDT By Jessica Lerner

SOLVE Advisors, Inc.,a market data platform provider for fixed income securities, has acquired fintech company Lumesis.

Lumesis' products operations and teams will be integrated into SOLVE's existing organization. Upon integration, the Lumesis DIVER product suite will provide additional municipal asset class workflow, analytics related to price transparency, and regulatory-related solutions to SOLVE'S Market Data Platform.

Lumesis, founded in 2010, has always been looking to expand its presence in the fixed income marketplace, saidChief Executive Officer Gregg Bienstock.

"We got to know each other, and it made a lot of sense for us," he said of SOLVE, describing the two companies as a "complementary fit."

Prior to the merger, SOLVE co-founder Eugene Grinberg said he had talked to Bienstock and Lumesis President and Chief Operating Officer Tim Stevens, about working together as channel partners. But in the past year, Grinberg said SOLVE, which acquired Advantage Data and Best Credit Data earlier this year, became more interested in combining with firms that have "interesting" products, a strong team and can add to its internal expertise.

"Tim and Gregg have obviously built a great business there. They're seen as experts and thought leaders in the muni market," he said. "This acquisition made a lot of sense."

Financial details of the acquisition were not disclosed.

SOLVE launched in 2011 with the goal of improving price transparency across fixed income markets, primarily collecting pre-trade price data, such as bids and offers, across half a million different securities, including munis, according to Grinberg.

"Basically, a lot of fixed income markets are still very much voice and over the counter, and pricing is communicated via email often or chat," he said. "So we work with the buy-side and sell-side to make sense of the chatter and organize price data and create workflow analytics, that ultimately saves people time."

Grinbeg noted Lumesis' pricing product, in particular, and some of the upgrades to it have an "interesting overlap" with what SOLVE has built.

Lumesis has expanded its data services in the municipal market over the years, harnessing technology to create more efficiency with the digital platform, which also provides users the ability to refine parameters and comparable securities to reflect their own professional judgment. The company introduced a Debt Analysis tool being integrated into its Pricing Platform to provide clients with more configurable information in the market in mid-September.

"There's a lot of opportunity to integrate everyone's products and create a more unified offering across fixed income markets that serve the primary and the secondary side of the business," Grinberg said.

SOLVE's database gives Lumesis access to data the company doesn't have, while Lumesis' data and technology can be beneficial for SOLVE, Bienstock said.

"It's essentially the integration of the databases and integration of the technology, which is going to allow us to serve a broader fixed income market, instead of just the muni market," he added.

Traditionally, SOLVE is more of a data company, whereas Lumesis' products focus on creating workflows to serve "different use cases, different personas [and] analytics that help make sense of the data," Grinberg said.

The initial focus, he said, is "how can we leverage each other's offerings to make the existing products better, how can we do some quick integrations?"

For example, having the SOLVE price transparency data in the DIVER product suite will expand the ability to pull in comparable pricing to put together representative scales, the firms said.

"This is more about deeper integration between the products," Grinberg said."There's a similar look and feel and it starts to look like a single unified product that serves kind of all sides of the business."

The deal closed in the past week, and the database integration will take time. However, Bienstock noted the priority "is to leverage each other's expertise, both technical and otherwise, to bring more to the market sooner."

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.