Limeyard Indices, a Swiss-based index provider, has entered into a strategic partnership with the Vienna Stock Exchange in a move to strengthen its index offering globally, by offering real-time calculation and data dissemination.
The partnership will not only be a way to combine expertise but also to gain access to their respective markets, with the two companies expecting excellent synergies from this partnership, according to Patrick Valovic (pictured), founder and managing partner at Limeyard, and former chief financial officer at Stoxx.
The new provider wants to capitalise on "the strong belief that there was a gap in the market", said Valovic. "Clients are asking for more innovative solutions, produced in a timely fashion," he said. "Our cloud-based technology, with a highly-automated operating process [will] enable us to provide an excellent quality at a reasonable price in a timely fashion."
The partnership will certainly enable the company to expand its offering in the Austrian market through structured certificates, warrants and ETFs, according to Valovic. "The structured products market in Austria is pretty active and we will potentially work together with the VSE on their index offering," said Valovic. "However, our aim is to build a global offering and target clients globally. Our approach is substantially different to other providers as we put a strong emphasis on scalability and innovation, as well as in providing a balanced suite of traditional and proprietary benchmarks."
The index provider was launched in Zurich in July 2016 by a team of indexing experts. Based on a cloud infrastructure, the index provider intends to design both white-labelled and Limeyard branded indices.
'Diversification is key' to the exchange strategy for the next few years, according to Christoph Boschan, chief executive officer of the Vienna Stock Exchange. 'We already have a well-established and profitable index business,' said Boschan. 'Partnering with Limeyard represents a fantastic opportunity to grow outside our core markets."
Limeyard's catalogue includes traditional equity indices in the global market, and plain vanilla indices for Europe, US and Apac regions, but also innovative indices, like its Swiss Low Risk Factor 30 and Absolute Alpha Switzerland (which has performed 57% in 2017 and 13% this year). In addition, the company plans to offer thematic indices by partnering with dedicated data and research companies a fixed-income index family later this year or early next.
"Our model, the multi-objective optimisation model, which was developed by one of our partners, is specifically targeted at providing this kind of functionality to product providers," said Valovic. "Our unique, cloud-based infrastructure is state of the art compared with old IT infrastructure, or even excel spread sheets used by other providers in the market. This enables us to tailor our services to a client's specific needs and in addition, to pass on any efficiency gains in terms of highly competitive fees. Our goal is to become a global index provider of traditional and customised indices."
The management of Limeyard holds the majority of shares in the company. Minority shareholders includes the Vienna Stock Exchange and a Swiss Family Office. There are no other investors in Limeyard. The index provider has offices in New York, Paris, Zurich and now Vienna.
Vienna Stock Exchange has developed and distributed a wide range of 130 tradable indices, covering Central and Eastern Europe as well as Russia to more than 140 financial institutions globally.
In January 2018, there were 5,930 structured certificates traded on the Vienna Exchange worth €56.2m from three issuers; 2,513 warrants worth €1.6m from two issuers, and nine ETFs worth €2.8m from two issuers. SRP data shows that up to five structured products providers have been active in the leverage and non-flow part of the exchange, including Goldman Sachs (four turbo certificates), Erste Group Bank (2,190 products), Raiffeisen Centrobank (4,249 products), UBS (10 trackers/leverage) and Unicredit (one product), according to the VSE.
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