Tullett Prebon expands into valuations with acquisition of OTC Val

Tullett Prebon expands into valuations with acquisition of OTC Val

Interdealer broker Tullett Prebon is to expand its market data business into valuations services with the acquisition of Vancouver-based OTC Valuations for an initial consideration of $0.6 million.

OTC Val is being sold by its management shareholders, with deferred consideration up to a maximum of $1.4 million payable in cash subject to future revenue targets.

The company has a strong focus on the valuation of illiquid, hard-to-value OTC securities and exotic structured products. It also provides vanilla instrument valuation services and coverage of OTC instruments in fixed income, interest rates, credit, FX, equity, hybrids and structured products.

Clients, which include banks and corporations, custodians, fund administrators and asset managers, elect to receive scheduled independent portfolio valuations and risk reports from OTC Valuations, either as their primary provider, or to complement existing price sources. Other clients include service providers who outsource their more complex valuations requirements completely to OTC Valuations who in turn provide white-labelled solutions.

Tullett says the acquisition reflects the increasing demand from its clients and the financial industry as a whole for independent valuation services.

Paul Humphrey, CEO of Tullett Prebon Electronic Broking and Information, comments: "Recent market conditions coupled with increasing regulatory oversight have precipitated the growth in demand from fund managers for independent valuation services, notably in the area of complex derivatives. Given Tullett Prebon's extensive involvement in these markets, both as an inter-dealer broker and as a leading supplier of market data, building a presence in the valuations arena is a natural extension of our risk management services."

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