Capitolis, a financial technology company based in New York, acquired Capitalab from BGC Group for $46 million. The latter specializes in rates portfolio compression and margin optimization. This practice involves replacing or reducing the size of over-the-counter derivative positions.

Capitolis Boosts Derivatives Operations

According to the official announcement, the deal could enhance Capitolis’ capacity in the rates portfolio compression market, where Capitalab has reportedly compressed over $10 trillion in options contracts.

Commenting about the acquisition , Gil Mandelzis, the CEO and Founder of Capitolis, said: “Portfolio compression and margin optimization are extremely important to the capital markets and, when properly executed, truly help the financial system and its participants.”

“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.”

Executive Changes

The acquisition involves executive changes by Capitolis. Gavin Jackson, the company’s Founder and CEO, will reportedly join Capitolis’ executive team following the transaction. Capitolis has recently been expanding its operations through partnerships with major global financial institutions, including Citi, Morgan Stanley, and UBS.

“We are thrilled to join forces with Capitolis, which will allow us to combine our strengths, talents, and shared vision to create something even more remarkable,” said Gavin Jackson, the Founder and CEO of Capitalab.

“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.”

In July, Capitolis launched a new technology to reduce the time and resources needed for banks, brokers, and hedge fund firms in approval processes. The firm described the achievement as a milestone in executing same-day tear-ups for FX options.

The added platform seeks to reduce the time for transaction approval to T+1 or for up to 70% of all novations. Mandelzis mentioned that: "Capitolis had already made tremendous strides in reducing market risk, enabling more novations, and enhancing balance sheet efficiency for our participants."

"Over the past year, we've seen a nearly 50% increase in volume on the platform and added many new FX prime brokers, executing banks, and significant buy-side participants."