Hilco Streambank (“Hilco”) is seeking offers to acquire the intellectual property assets of Katana Labs Limited (“Katana” or the “Company”).
Developed in-house at ING, Katana was a project devised to assist portfolio managers and traders with day-to-day decision making. Driven by machine learning technology, Katana’s adaptive approach to bond market trends utilises big data to provide high quality positioning insights to professional traders and portfolio managers. The digital advisor was developed in collaboration with some of the largest asset managers in Europe from the outset. Having proven effective during the preliminary stages, the pre-trade analytics tool advanced from prototype to market-ready in just over a year, and in light of its success, in 2019, ING decided to launch Katana as a standalone business.
Developed in-house at ING, Katana was a project devised to assist portfolio managers and traders with day-to-day decision making. Driven by machine learning technology, Kantana’s adaptive approach to bond market trends utilises big data to provide high quality positioning insights to professional traders and portfolio managers. The digital advisor was developed in collaboration with some of the largest asset managers in Europe from the outset.
Having proven effective during the preliminary stages, the pre-trade analytics tool advanced from prototype to market-ready in just over a year, and in light of its success, in 2019, ING decided to launch Katana as a standalone business.
A platform for data-driven analytics, Katana seeks to track pairs of bonds and make swap recommendations to profit from market dislocations. Katana monitors the relative credit spread for traditionally paired bonds using big data and machine learning to provide insight into bonds’ relative value by tracking market behaviour. When a divergence emerges in bonds that have historically seen paired trends, Katana will advise that a swap is made to the cheaper offering to capitalise on the correction from the depressed bond price. Katana is expected to predict market compression with around 90% accuracy.
Katana uses similarity factors such as currency, country of risk, credit rating, and sector to identify the pairing of bonds to provide a single similarity score. The bonds are given a present z-score to describe their current disparity, compared to historical data for these pairings. An algorithm is then used to predict the likelihood of compression in the bond pairs spread. The platform also includes a powerful set of filters to help users navigate the opportunity space efficiently.
The model can deliver an extensive overview of the most significant opportunities from screening nearly 200-million bond pairings while providing relative value insights and trade ideas for bonds from North America, Europe and Emerging Markets. The model monitors holdings and watchlists alongside broader market trends that allow asset managers and traders to identify opportunities more efficiently and confidently. There are two main processes involved in the model, one that identifies relevant pairs and secondly, one that identifies dislocations and predicts compressions.
Dislocations are shown to have been 90% accurate over a measured time of 30 days.
The Katana offering represents a unique opportunity to acquire an advanced pre-trade analytics technology, including the supporting intellectual property assets, which is the first of its kind. The technology is already integrated into the Bloomberg app portal with c. 330,000 users and its own web-based delivery platform providing serverless access to users.
The Katana Brand
A FinTech start-up established from a spun-out in-house project at ING, is highly regarded by asset managers and traders alike, and recognised as an Innovator 2019 by Global Finance Magazine. The brand stands out in the FinTech space as one of the only pre-trade analytics platforms on the market available directly from the website or via the Bloomberg App Portal to identify relative value opportunities within the market. It holds key partnerships with Google Cloud Partner and IHS Markit.
Confidence in the brand was bolstered by strategic £1.75m investment from ING Ventures as part of a funding round of £2.22m.
Strong recognition by key industry players has also boosted the brand, Katana has been adopted by leading financial institutions such as ING, PGGM and Pinebridge Investments.
The Katana Platform
Developed in-house, the Katana pre-trade analysis platform is a web-based design which can also be accessed as a single sign-on app through the Bloomberg app portal.
The platforms architecture enables it to be a serverless solution through its use of opensource and cloud-based technologies.
- The platform infrastructure in Google Cloud fully developed in-house.
- A bespoke interface designed in-house.
- Data Science research & development for the model is available including unpublishd documentation.
- Software documentation is available describing the technical and operational design aspects of the offering.
- Lists of source coding and software licences is available.
The Company holds one registered trade mark to protect the “Katana Labs” brand name, covering software for financial services, trading in bonds and software as a service, and protecting UK and EU territories.
The primary www.katanalabs.io domain name is available to acquire.
Website Content & Social Media Content
The Company’s informational website, hosted at www.katanalabs.io, showcases the Company’s product and contains a depth of rich content and imagery.
Rights in the social media accounts are also available to acquire across Twitter and LinkedIn.
Offers are due November 26, 2021 at 4pm GMT.
All expressions of interest and bids are to be directed to Hilco in writing. A Bid Submission Form is available on request. Please contact Hilco to gain access to a virtual data room of further information on signing a confidentiality agreement.
Key Terms & Conditions
The bidder acknowledges that Hilco acts as an agent, who offer for sale only what right, title and interest (if any) the Company possesses in the assets. Such sale will be without any warranties, expressed or implied. Hilco has not verified the information provided, and bidders are deemed to have carried out their own due diligence Hilco Streambank’s full Terms and Conditions apply.