Exclusive: Divisa Capital’s Funding and What PBs Get from Football Deals
- Divisa’s CEO Mushegh Tovmasyan on the $100m warchest and the merits of football sponsorships in institutional FX
After the groundbreaking deal announced on Monday, Mushegh Tovmasyan, CEO of Divisa Capital, shared some insights with Finance Magnates. The company's $100 million funding round was a surprise to the markets as the firm moves to a new level.
What was the main reason for you to seek outside financing?
After the SNB event that hit the industry in January 2015, the institutional credit space has been changing. The inevitable effect on the industry has mobilized us to look into funding opportunities to tackle the new status quo and secure better trading conditions for our clients.
What made you commit to this deal now?
With interest rates going higher, the likelihood of the carry trade to come back has increased. This is a great opportunity for brokers to capitalize on market Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term and increase their revenues in 2017. While regulators have been looking to limit leverage for retail, prime of primes need to continue leveraging their balance sheet because when the carry trade comes back clients are starting to accumulate longer term positions. When you add up all these factors we have foreseen a credit crunch for the industry and saw the need to act.
With interest rates going higher, the likelihood of the carry trade to come back has increased
How did you find your investors?
Instead of hiring an investment bank to find us an investor, we chose to leverage our contacts and good relationships in order to obtain the necessary funding. After thorough due diligence we have formed a strategic alliance with our investors. We are a good match with and they are confident in our business model.
How long do you expect the regulatory approval process to take?
It will probably take about a month. It is not something that we can control, but we are quite comfortable with our legal team and with the ground work that has already been done to expedite the process.
How do you plan to spend the money?
Acquisitions aside, in our space it is all about having the appropriate balance sheet strength in order to be able to do secure credit lines with major prime brokers. We can now increase our credit lines and provide better rates to our clients thanks to more bilateral Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term relationships.
In our space it is all about having the appropriate balance sheet strength in order to be able to do secure credit lines with major prime brokers
Do you plan to also dedicate some additional funding to marketing and how is your Watford football sponsorship deal going?
We do want to grow our team and our global presence and we intend to channel some funding in that direction.
Due to the Barclays sponsorship of the Premier League, deals like ours with Watford have not been possible until recently. We were the first company from the financial industry to do a deal with a Premier League team after the exclusivity agreement with Barclays lapsed.
When Watford is buying foreign exchange, they do it through our facilities. This way we are getting an additional revenue source from them and in exchange for that we spend money with the team in the form of marketing.
Our target for this deal wasn’t to get leads, but rather to have a place in London for hospitality. We have a hospitality box every home game and virtually every possible weekend has been fully booked for our partners and clients.
After the groundbreaking deal announced on Monday, Mushegh Tovmasyan, CEO of Divisa Capital, shared some insights with Finance Magnates. The company's $100 million funding round was a surprise to the markets as the firm moves to a new level.
What was the main reason for you to seek outside financing?
After the SNB event that hit the industry in January 2015, the institutional credit space has been changing. The inevitable effect on the industry has mobilized us to look into funding opportunities to tackle the new status quo and secure better trading conditions for our clients.
What made you commit to this deal now?
With interest rates going higher, the likelihood of the carry trade to come back has increased. This is a great opportunity for brokers to capitalize on market Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term and increase their revenues in 2017. While regulators have been looking to limit leverage for retail, prime of primes need to continue leveraging their balance sheet because when the carry trade comes back clients are starting to accumulate longer term positions. When you add up all these factors we have foreseen a credit crunch for the industry and saw the need to act.
With interest rates going higher, the likelihood of the carry trade to come back has increased
How did you find your investors?
Instead of hiring an investment bank to find us an investor, we chose to leverage our contacts and good relationships in order to obtain the necessary funding. After thorough due diligence we have formed a strategic alliance with our investors. We are a good match with and they are confident in our business model.
How long do you expect the regulatory approval process to take?
It will probably take about a month. It is not something that we can control, but we are quite comfortable with our legal team and with the ground work that has already been done to expedite the process.
How do you plan to spend the money?
Acquisitions aside, in our space it is all about having the appropriate balance sheet strength in order to be able to do secure credit lines with major prime brokers. We can now increase our credit lines and provide better rates to our clients thanks to more bilateral Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term relationships.
In our space it is all about having the appropriate balance sheet strength in order to be able to do secure credit lines with major prime brokers
Do you plan to also dedicate some additional funding to marketing and how is your Watford football sponsorship deal going?
We do want to grow our team and our global presence and we intend to channel some funding in that direction.
Due to the Barclays sponsorship of the Premier League, deals like ours with Watford have not been possible until recently. We were the first company from the financial industry to do a deal with a Premier League team after the exclusivity agreement with Barclays lapsed.
When Watford is buying foreign exchange, they do it through our facilities. This way we are getting an additional revenue source from them and in exchange for that we spend money with the team in the form of marketing.
Our target for this deal wasn’t to get leads, but rather to have a place in London for hospitality. We have a hospitality box every home game and virtually every possible weekend has been fully booked for our partners and clients.