In other news, DTCC partners with CloudQuant, Northern Trust taps Saphyre, and RBC buys HSBC Canada.
Impact Cubed Makes an Overture to North America
Officials at Impact Cubed, an ESG data, analytics, and investment solutions vendor, recently announced that they are offering “free access to their platform for key public pension funds” in North America.
The Impact Cubed platform is intended to help end-users see the granular impact of environmental, social, and governance (ESG) aspects upon “their portfolios, funds, securities and more, across thousands of economic sectors, business revenue streams and individual geographies,” according to the vendor.
The granular view is intended to help with “benchmarking and better portfolio engineering to match clients’ investment values,” officials add.
“Equipping public pension funds with tools to see the granular ESG impact of their investments will empower them to have more conversations about ESG with their managers and boards. We’re excited to announce this educational initiative at this year’s PRI conference,” says Libby Bernick, CEO of Impact Cubed, in a prepared statement.
In North America, there is a common practice “to use subjective ESG ratings, which can be controversial and confusing for pension funds,” Bernick says. “Instead, our tool equips pension funds with objective data and factual portfolio reports to show how their ESG impact compares to broad market indexes. Pension funds can also use our platform to validate fund managers’ claims about ESG performance. Access is available for public pension funds in North America and we will assess any similar public, not-for-profit pension funds in other regions on a case-by-case basis.”
The vendor says that “applicable asset owners can start a conversation about platform access by reaching out to info@impactcubed.com.”
CloudQuant Focuses On DTCC’s Data Services
Securities operations infrastructure provider the Depository Trust & Clearing Corp. (DTCC) is working with alternative data, research, and technology vendor CloudQuant (CQ) to deliver “new investment signal research and dataset analysis” based upon the data from the DTCC’s Data Services such as the Equity Kinetics and Investor Kinetics offerings, officials say.
The collaboration has “enabled CloudQuant researchers to successfully develop novel strategies outperforming the S&P 500 using DTCC’s anonymized and aggregated post-trade data, were published in two new reports: the Equity Kinetics paper and Investor Kinetics paper,” officials say.
The partnership is helping CloudQuant to decompose “investment returns to prove that DTCC’s Equity Kinetics and Investor Kinetics are novel sources of information not currently incorporated into market prices. This finding has enabled CloudQuant to generate new signals, based on the DTCC data, to assist investors in configuring strategies to inform trading decisions,” according to officials.
“With CloudQuant Liberator, CQ and DTCC research demonstrated a potential cumulative return of more than 220 percent over 10 years. CQ Liberator signals were leveraged to test the data on a quant basis, to identify strong investment signals that are valuable to both fundamental and quantitative investors in both long-only and long-short portfolio formats,” officials say.
“We are pleased to work with CloudQuant … to demonstrate how our activity-based data solutions can help our clients generate alpha as well as why our data services should be considered across a wide spectrum of investor types and trading strategies,” says Dan Magarino, DTCC managing director and head of data services product strategy, in a prepared statement.
“DTCC data is unique and provides an exclusive look into US equity market fund flows,” says Morgan Slade, founder and CEO of CloudQuant, in a statement. “These signals provide research and execution ideas to all client types who want to take full advantage of DTCC’s data.”
CloudQuant officials are encouraging firms to contact them if they want to give the collaboration a try.
Northern Trust & Saphyre Target Investment Ops Onboarding
Northern Trust has gone into production with Saphyre, the maker of a platform that digitizes pre-trade data and related activities, and is automating the account opening process for investment manager clients of Northern Trust’s Investment Operations Outsourcing (IOO) business, officials say.
The collaboration has yielded a “middle-office function to increase transparency and efficiency for events including account setup, account maintenance and asset transfer requests,” officials say.
Saphyre offers patented artificial intelligence (A.I.) technology that helps streamline “operational support from pre-trade through post-trade,” and which aligns with Northern Trust’s Whole Office strategy of integrating “proprietary architecture with innovative companies,” officials say. “As enhancements are made over the next year, Northern Trust will schedule a planned rollout to all its investment operations clients.”
The Saphyre platform enables data “to be entered once for simultaneous access by custodians, investment managers, asset owners and middle office teams supporting these accounts,” officials say. “The centralized data repository for all counterparties can reduce the potential for errors while shortening the lead time required to transition, open, and maintain accounts.”
“This is a revolutionary development for the industry. Northern Trust is the first to seize this unprecedented opportunity in the middle-office function, with far reaching, positive impacts for post-trade,” says Gabino Roche, CEO and founder of Saphyre.
RBC to Acquire HSBC Canada for $9.68 Billion
The Royal Bank of Canada plans to acquire HSBC Bank Canada to broaden its global banking and wealth management capabilities in a region that RBC knows well, officials say.
RBC will acquire 100 percent of the common shares of HSBC Canada for an all-cash purchase price of $13.5 billion in Canadian dollars ($9.68 billion in U.S. currency), according to the announcement. “All of HSBC Canada’s earnings from June 30, 2022 through close will accrue to RBC,” officials add.
“HSBC Canada offers the opportunity to add a complementary business and client base in the market we know best and where we can deliver strong returns and client value given our financial strength and award-winning service,” says Dave McKay, president and CEO, RBC. “This also positions us as the bank of choice for commercial clients with international needs, newcomers to Canada and affluent clients who need global banking and wealth management capabilities. It will help us better serve global clients looking to invest and grow in Canada.”
HSBC Canada has assets of $134 billion in Canadian dollars as of Sept. 30, 2022, approximately 130 branches and 4,200 full-time equivalent employees, officials say. RBC employs more than 92,000 full-time and part-time employees globally, including nearly 65,000 full-time equivalents in Canada.
The closing of the deal is expected by late 2023, which is subject to customary closing conditions including regulatory approvals, officials say.
RBC Capital Markets served as lead and primary financial advisor with Blake, Cassels & Graydon LLP, Allen & Overy LLP, and Wachtell, Lipton, Rosen & Katz serving as legal counsel for this transaction, officials say. Goldman Sachs & Co. LLC provided secondary financial advice on certain matters.
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