Startup iPerform Data Bows Near-Real-Time Bond Pricing

iPerform Data, a Montreal-based fixed income data and analytics startup, has launched its pricing service, after more than half a year in development, which aims to increase transparency in Canadian fixed income securities by providing evaluated prices, updated at 20-minute intervals.

The vendor was set up by Robert Perez and Louis Forget -- former employees at portfolio analytics software vendor StatPro -- to address shortcomings in current valuation processes, says Perez, who serves as chief executive of the startup.

iPerform is targeting index providers, fund managers and risk management professionals with its service, which uses contributed prices sourced from market participants and market data such as live treasury bond prices from third-party suppliers to power its credit curves -- though clients can also run their own proprietary datasets against the models in iPerform's database. In addition, since starting to test and roll out the service, Perez says front-office bond traders have expressed interest in being able to use the service to update spreads across their inventory.

"You can update your entire fixed income portfolio every 20 minutes. This gives fixed income portfolio managers... the ability to value everything and crunch numbers at a much higher frequency," Perez says. "The way things stand now are fine for buy-and-hold investors, but for anyone running an index -- or for bond traders who need to know exactly where prices are -- knowing the price level at any given moment is critical."

Clients can access iPerform's data and curves via a login on its website, where they will find price, yield and spread at any point in time, along with other information, such as detailed definitions of the security type and how it was valued, and can download the data in a range of formats to load into their own systems, while contributors can send prices to iPerform by email, FTP or in various file formats.

"This gives fixed income portfolio managers... the ability to value everything and crunch numbers at a much higher frequency.... The way things stand now are fine for buy-and-hold investors, but for anyone running an index -- or for bond traders who need to know exactly where prices are -- knowing the price level at any given moment is critical." - Robert Perez, CEO and co-founder, iPerform Data

Currently, iPerform provides curves for more than 320 Canadian government, corporate and agency issuers, covering a total of around 40,000 issues and synthetic securities, though Perez says the vendor ultimately aims to add coverage of US and European markets, as well. "We first built the database with global coverage in mind, so we're already set to price anything in the world -- we just don't have the data yet," he says. "We like to get at least five sources, and getting five US sources for all the data we need is hard. So we expect it will take until fall of next year to get into the US market, then another 18 months to two years to get into Europe."

In the meantime, the vendor aims to roll out automated market-implied ratings in the first half of next year that will also update on a more timely basis -- hopefully also at 20-minute intervals and associated with each issuer, Perez says, adding that he believes there is "some arbitrage to be had between a market-implied rating and the actual rating."