“Neovest was always renowned for its user-friendly interface that offers traders and portfolio managers advanced cross-asset execution management capabilities. The acquisition now allows us to offer our hedge fund clients a modular platform to allow them to perform their portfolio modelling, risk assessment, stress testing and error reduction in complex asset classes, as well as solving other challenges in their investment management lifecycle,” says Shah.

Client base 

“Our primary focus has always been hedge funds, so the client fit is well aligned,” Shah explains. The majority of LayerOne’s clients are hedge funds, and 75% of Neovest’s 500 clients fall into this category, with some overlap in hedge fund clientele. 

Neovest will continue serving clients globally, ranging from smaller funds managing USD 75 million, to the largest firms handling USD 100 billion or more. The addressable market is now much greater because the combined technology offering can accommodate a broader array of clients’ investment strategies and asset classes. Historically, Neovest mainly served clients’ equity long/short or global macro strategies, but now it can service clients with credit, multi-asset and multi-strategy objectives. LayerOne’s cross asset technology capabilities include bonds, interest rates and bank debt, amongst others. “Connectivity to various brokers and associated market data can cover extensive level one, two and three data across equities, futures and credit, including bank debt and OTC derivatives,” explains Shah.

Neovest continues to expand its client base beyond the US, securing mandates in Europe, including the UK and the Nordics, Asia and the Middle East. The office distribution of the combined firm has also become more global and less US-centric. Previously, Neovest staff were primarily based in the US, with headquarters in Orem, Utah, but now the 225 employees are almost evenly split between the US and international locations, including Europe and South America.

Innovation sandboxes

Innovation is guided by a combination of top-down, corporate-level strategic plans and bottom-up, spontaneous responses to specific requests from individual clients. “Development sandboxes are divided into 40% strategic initiatives, such as exploring the ability to support client activity in new asset classes; 10% technology, which is essential; and 50% initiatives driven by client feedback,” explains Shah.

Additionally, the evolution of innovation is structured around four key pillars that support ongoing workstreams, each progressing at its own pace. “We use an agile methodology with rolling quarterly roadmaps to track progress in each area,” says Shah. These four pillars were in place before the LayerOne acquisition but have since been expanded in scope and scale.

Open platform

“Neovest has always embraced modularity. This can be illustrated by the sheer number of integrations we have made to make our clients’ workflow easier and more complete,” says Shah.

Neovest’s new suite of products will be called ‘PortfolioOne’ and it consists of 8 individual modules. These modules can be sliced and diced in a few ways, including: Portfolio Management, Order Management, Execution Management, Risk Management, Compliance, Post-trade Operations, General Ledger/ABOR and Data Management. For more details about Neovest’s product suite, please visit www.neovest.com.

“Our clients’ needs are our priority and finding the best solution for them is our goal. Whether a client requires one or all our modules, or prefers a combination of multiple vendors, or their own in-house systems, we can accommodate that,” says Shah.

The open platform is expanding its services by developing REST API capabilities and documenting public APIs for clients to integrate the modules seamlessly. “Each module offers APIs for integration, including FIX API and REST API, along with SFTP as integration options. We are constantly striving to improve the integration process,” Shah adds.

Asset class expansion

The acquisition has allowed Neovest to provide the full spectrum of asset classes to clients. “Our clients love to hear that we support their ability to execute (through their brokers) and manage their activity in equity, options, futures, fixed income, credit, derivatives (including equity, rates, credit, var/vol swaps), FX, exotic FX options and bank debt,” says Shah.

Automation and workflow

“Automation, data and client experience are everything,” says Shah. The automation workstream reduces the number of manual clicks to mitigate repetitive stress injuries and enables clients to set rules allowing them to more efficiently select their brokers. This capability enables traders to create efficient rules that enhance productivity and deliver greater value.

Tech transformation: speed, latency and cloud

“Financial technology platforms will always remain the backbone of buyside workflows, and we will require enhancements as the needs of our clients change,” says Shah. Technology transformation could cover many angles and is currently focused on improving latency and stability, with Cloud being the key deliverable.

Neovest is latency-sensitive, though not necessarily at ultra-low levels. “Our clients are not latency-sensitive to the same degree as high-frequency trading (HFT) firms, but we do take latency into consideration and seek to reduce it. While we don’t offer colocation, we are moving to Google’s Cloud Platform (GCP) in regions and availability zones where our clients operate, to be closer to them. This will help reduce latency and is part of a multi-cloud initiative that spans the next two years,” reveals Shah.

Hybrid human and electronic trading

Equities, futures, options and FX are already electronic, and credit is moving in the same direction. Neovest recognises the need for a hybrid solution due to the varied nature of clients’ trading strategies. “Ticket volumes are increasing, but ticket sizes are decreasing, as the algorithm concept comes to fruition. Human interaction can still be needed to modify issues, send signals on potential issues and interact with screens and systems. Therefore, we have a continuum hybrid solution,” says Shah.

Neovest can thus accommodate clients’ ability to engage with their brokers on a high touch basis, perhaps in connection with clients’ block orders, as well as working with baskets and pairs.

Broker neutral

Post-acquisition Neovest will remain broker neutral and agnostic to third party systems. While smaller hedge funds may start with just one broker, larger hedge funds often collaborate with ten or more brokers, some engaging with hundreds of exchanges and venues.

Neovest collaborates with over 340 equities, futures, options and FX market brokers, using its broker FIX network to allow clients to route orders to over 70 equities exchanges, as well as futures and options exchanges and OTC FX.

Integration and mutual learning

“Our culture has been a fundamental reason for our growth, success and longevity of our employees’ careers at Neovest,” says Shah.

There may be perceived cultural distinctions between Neovest and LayerOne, considering their respective origin stories, but there may be more similarities than differences. “Neovest has operated as its own legal entity and its own company. LayerOne is also a nimble FinTech, like a hedge fund. We can learn from each other and evolve around the process side of things,” says Shah.

Culture apart, the nitty gritty of integration should also run like clockwork. “APIs passing back and forth remove the need to key in data and clients should be able to seamlessly log into one platform,” says Shah.

Clients can select the specific modules that best align with their needs, without any obligation to adopt the entire suite of functionality.

Swift onboarding and responsiveness

Neovest prides itself on its swift client onboarding process, typically completed in less than 90 days and sometimes as quickly as 5 or 6 weeks. “Not only does Neovest onboard the client initially, but we also grow with the client. We can onboard new users or pods within a day. This allows our clients to focus their resources and time on their investment strategy and growth rather than unnecessarily worrying about their technology,” says Shah.