Capitolis Expands Rates Franchise with Capitalab Acquisition

Capitolis is expanding its reach in financial markets with the acquisition of Rates portfolio compression service Capitalab from BGC Group.

The $46 million buy comes just a week after Capitolis announced new strategic investment from four banks, including new investors Morgan Stanley and UBS, and will allow it, the firm says, to offer more solutions to the industry. To date, most of Capitolis’ growth has been organic, with new products and clients added, however this is the second acquisition by the firm, after that of LMRKTS in 2021.

The latest deal allows the firm a quick expansion into the Rates space via Capitalab’s footprint in those markets, the latter has compressed a gross notional amount of more than $10 trillion of options contracts. Capitalab’s CEO, Gavin Jackson, will join the Capitolis executive team.

BGC will retain the FX component of its risk reduction business, which was previously under the Capitalab banner, this will be rebranded Fenics NDF Match.

“Portfolio compression and margin optimisation are extremely important to the capital markets and, when properly executed, truly helps the financial system and its participants,” observes Gil Mandelzis, CEO and founder of Capitolis. “Capitalab’s highly innovative technology complements our existing suite of award-winning solutions and together we will create a ‘one-stop shop’ for compression. We look forward to welcoming the team and believe that together we can take their unique offering to the next level.”

Jackson adds, “[This deal] will allow us to combine our strengths, talents and shared vision to create something even more remarkable. This powerful combination will enable us to deliver an even more exceptional service to our clients, ensuring their needs remain at the heart of everything we do.”