Indus Valley Partners co-founder Bijesh Amin answers SCI's questions

Q: How and when did Indus Valley Partners become involved in the securitisation market?
A: I co-founded Indus Valley Partners in 2000 to provide a specialist solutions firm focused exclusively on the alternative asset management industry. We are now the largest firm specialising in this field.

We currently have 380 professionals, working across four time-zones, covering the US, India and Europe, and our clients currently manage around US$830bn in AUM. Around 60 to 70 of our 80-plus clients are hedge funds, with the rest made up of largely private equity firms, real estate investors and commodity traders.

We play a key role supporting our clients in their pursuit of alpha by using our solutions to help them analyse their portfolio and investment data, helping to institutionalise their fund platforms as they grow and helping them to reduce their non-investment risks. Our services and solutions are tailored to the specific requirements of any fund, across strategies and asset classes - including structured credit-related issues.

A key objective for a lot of our clients is to add more AUM and investors, but to still keep tight control over their operational processes. We allow these firms to get a better grip on their businesses and assets with our solutions. For example, we can come in and build the time series of returns across a portfolio of CDOs or help model a leveraged loan for subsequent data analysis, if that is what the client requires.

Q: What are your key areas of focus today?
A: In the current market, regulation and regulatory compliance is a hot topic and we are seeing a great deal of funds buying our RAPTOR solution, so they are compliant with AIFMD, UCITS or EMIR. In the US we have many clients using our solution for filing Form PF. Since we cater for both single- and multi-jurisdiction funds, we are very busy in this area.

Another key area is that of data governance; ensuring that a fund has a practical way of reconciling its portfolio and valuation data with its counterparties, that there is sufficient control over model/pricing inputs and subsequently investor reporting.

Q: How do you differentiate yourself from your competitors?
A: All of our solutions from our data warehouse to our securities modeller support multiple strategies, counterparties and asset classes. Many competitors do not have the breadth and depth of asset class coverage that we do. They also lack the sheer range of solutions and services we offer.

One of our clients recently won a prestigious award for best-in-class data management. They had developed many proprietary solutions for their data management and performance reporting during a period where few third-party solutions existed, so they brought us in to both update and consolidate their systems.

Through the IVP Polaris data warehouse, we provided a solution that served a variety of constituencies within their funds, such as portfolio managers, risk, compliance and operations. By ensuring each set of users operates on the same underlying data sets, we achieved an unprecedented level of data quality and control.

Q: Which challenges/opportunities does the current environment bring to your business and how do you intend to manage them?
A: We would like to add to the list of funds that we work for in the European market. Right now we have four clients in London, two of which are hedge funds, and we have several European clients.

But we want to expand further in this market. Regulatory upheaval and greater institutional investor activism has meant that funds - now more than ever - need to look at putting in place solutions such as ours.

Another challenge is actually finding the companies that need the technology to scale their business. Investment firms that are more in need of software expertise and solutions to scale their business are more likely to be in greater need of our services. We need to tap this area of the market.

Q: What major developments do you need/expect from the market in the future?
A: Regulation is playing an increasingly key role in shaping the market. For example, we are helping a major investment bank spin out their structured finance trading arm right now as a consequence of regulatory pressures. More and more structured finance activity is heading to alternative asset managers as regulatory capital requirements, such as Basel 3, change the economics of these businesses for banks.

If the current players are squeezed out of the market, we could see a form of structured finance shadow banking. The onus could shift to hedge funds and others to take the space, but we could also see a new form of financial entity chart a new path for the market.

These entities would likely be quasi-regulated and take in external investor capital under an explicit yield-plus model. We are already seeing developments like this in middle-market lending and I would not be surprised to see this develop next in other credit markets, such as potentially leveraged loans or ABS.

JA