Municipal finance data company DPC DATA acquired automated analytics platform BOND DATA, the company said Wednesday.
The explosive growth of separately managed accounts in the “investment management industry has accelerated the need for an automated bond screening system that combines fundamental credit analysis with relative yield evaluations,” but no such system exists as a “vendor turnkey solution,” said a press release.
The BOND DATA application is designed to fill that critical market need, the release said.
On a pre-trade basis, the tool can “select bond offerings with the best combination of credit momentum and yield attractiveness versus comparable bonds,” the release said.
As a surveillance tool, “the BOND DATA application can help optimize current portfolio bond holdings by categorizing them into ‘strong/neutral/weak’ categories, again based on credit momentum and yield attractiveness,” according to the release.
Currently, BOND DATA’s platform uses
DPC is “looking to talk to some other providers” about expanding the available data underpinning BOND DATA’s metrics, he said.
Clients have asked for the ability to see what specific data informs each metric generated, he said. That hasn’t been possible, but Hoffman said his team is looking at how that could change now that DPC owns the platform.
Michael Furla, a co-founder of BOND DATA, will work at DPC as a consultant, Hoffman said. Paul Moon, BOND DATA’s other co-founder, will be DPC’s vice president of software development, focusing mainly on the platform, Hoffman said.
DPC first met with Furla three years ago, when he was first working on BOND DATA in his spare time and seeking municipal financial data to underpin the platform.
“He didn’t have too much money to spend, but we got an overview of his methodology, and it was really fascinating,” Hoffman said. “So, we gave him a good deal.”
Late last year, as BOND DATA was trying to court additional investors, Hoffman said, he pitched the acquisition.
“I said, ‘instead of us giving you money as an investment, why don’t you come work for DPC?” he said. “I think we were lucky to find them, and they were lucky to find us.”
“It felt like a natural fit,” Furla and Moon said in the press release.
“We were already using DPC DATA’s comprehensive municipal financial database as the foundation for our credit momentum models,” they said. “Full integration into the DPC platform will allow us to further leverage DPC’s other market-leading resources.”
Long term, Hoffman said, his team is excited to have their own platform to implement their municipal financial data, which has previously been sold to clients and
“This enables us to dream a little bigger about what we can do with analytics,” he said. “There’s a lot more we can do now that we have a platform.”