A fintech firm helping fund managers negotiate Mifid II compliance challenges has received a cash injection from venture capitalists.
Illuminate Financial Management, a specialist venture investor in capital markets financial technology, has made a strategic investment into FeedStock, which filters, categorises and tracks investor research using complex artificial intelligence software. This can then be embedded into its clients’ internal systems.
The value of the investment was not disclosed.
Illuminate has been seeking a company that can help address the Mifid II regulatory environment around research, alongside addressing the longer-term challenges of information overload on the buy-side.
After due diligence, it decided FeedStock was the best home for its investment.
FeedStock categorises and prioritises relevant research in a bespoke way for the fund manager or analyst.
This processed information is contained on a platform with additional filter, search and evaluation tools, producing unprecedented efficiencies.
There are further controls on the system to manage unsolicited research promotions; often referred to as inducements.
Through multiple data sources, FeedStock automatically calculates all research consumed, accounting for meetings and calls, enabling buy-side institutions to produce defensible, transparent metrics when budgeting and paying for research.
The data produced is both quantitative and qualitative ensuring that the research payments ensuring it is accurate and in line with the Mifid II regulations.
FeedStock, which was co-founded by former broker Charlie Henderson and ex-GAM fund manager Lucas Wurfbain at the start of 2016, said it has a number of asset managers on the system and its client base continues to grow.
‘It is testament to our growing business that we have received an investment from Illuminate Financial Management,’ Henderson said.
‘Their in-depth knowledge of the capital markets fintech sector combined with their existing strategic partnerships make them the ideal investor for Feedstock. We look forward to working with their team, to aggressively grow the business.’
Illuminate founder and managing partner Mark Beeston added: ‘The twin challenges of information overload and Mifid II compliance around research have created both an efficiency problem, and a compliance issue for the buy-side
‘The team at Feedstock have experienced these issues first hand from both buy-side and sell-side and we are excited to be part of their journey as they bring state of the art technology to this key industry challenge.’