BondHub Technical Overview by Thomas J. Evankovich™, CFA
SEATTLE – A customer survey published by The Banker, rated BondHub the top online fixed-income cross-matching system for investors. BondHub provides an open, independent, price-transparent marketplace for corporate, municipal and mortgage-backed bonds. The firm serves financial advisors and portfolio managers at small institutions, and traders and representatives at broker-dealer firms, enabling qualified buyers and sellers to directly interact through an easy-to-use online application. BondHub’s desk of bond professionals is available by phone to provide assistance and access to an expanded range of securities.
Only six months after launching its service, more than 420 professional traders, portfolio managers and financial advisors from over 250broker-dealer firms and institutions have used the BondHub trading site. These users contribute a solid and growing base of inventory and liquidity. BondHub’s inventory partners post 3,000 to 4,000 offerings daily of corporate, municipal and mortgage-backed securities, available to trade anonymously online. Over 50 retail brokerage firms that employ nearly 100,000 financial advisors have accounts with BondHub, bringing a large potential order flow to the BondHub trading community. “We are pleased with the strong customer response we’ve received to our comprehensive solution for the needs of independent financial advisors, portfolio managers and Registered Representative Networks,” said Tom Evankovich, CEO and founder of BondHub. “BondHub offers a wide array of bonds at wholesale prices, an easy-to-use online application with useful descriptive and analytical features, and over-the-phone service options.”
All BondHub requires from the user to get started is an Internet connection and delivery versus payment instructions. There are no charges for access to descriptive information on specific bonds and listings of live offerings. Transaction fees are fully disclosed with every ticket to enable informed trading decisions. “BondHub has proven a very useful tool for us to provide great service to our reps and boost our trading desk efficiency. We are using BondHub with increasing frequency for posting bid-wanteds,” said Steve Quoy at Global Capital Securities. “The design of the BondHub system provides the security and control that we’ve always had with voice-brokered transactions, without requiring any software installation or configuration hassles.” “I got started with BondHub because it provided me a wealth of information for free,” said, Andrew Loechl, CFA, a registered investment advisor with Eagle Harbor Asset Management. “I’m using it increasingly to build fixed-income portfolios for my older clients who need cash flow.” “BondHub provides our firm with easy access to a large distribution channel for our product inventory,” said Jeff Shackett at RH Investments. “BondHub’s tools for posting inventory and options for either firm or subject offerings made it very straightforward for us to get our inventory represented in the BondHub channel.” “Now that we’ve established a solid base of inventory and liquidity, we are setting our sights on bringing large numbers of buy-side customers into the BondHub community,” said John Swanson, vice president of Alliances at BondHub. “We are raising awareness about the benefits of BondHub among regional retail broker-dealers, registered investment advisors and investment officers at small institutions.”
To join the BondHub community, visit http://www.Bondhub.com and complete the online registration request form. Customers can start out on the trading site, get a demonstration first, or even “practice” on a site where their trades will not be processed. “We’re making continual improvements to our trading platform based on customer feedback,” said Ole Hellevik, development manager for BondHub. “We already offer innovative notification features that enable users to receive alerts on their home page or via e-mail when a bond offering they’re seeking or a response to their offering is posted on BondHub. Now we’re taking ease of use a step further with the introduction of BondAlert Messenger™, an applet that continually runs in the background and pops up when you have an alert on BondHub. Click on the link describing the alert and you will be taken directly to the details page for the offer or bid-wanted. With BondAlert Messenger™ running you can capture more trade opportunities.”
The Puget Sound Business Journal Feb 21, 2001
BondHub.com Inc. of Seattle has launched its online bond-trading Web site, bucking the dot-com trend of closing Web sites and laying off workers.
Beginning Feb. 26 BondHub will allow investment advisers, bond dealers and institutional investors to purchase municipal, corporate and mortgage-backed securities online. Founded in September 1999, the company has already been trading securities over the phone while it developed the technology to operate its Web-based model, said BondHub founder and CEO Thomas Evankovich.
That trading has provided the company with early revenue, as well as developed relationships with 48 trading firms. “This number will grow quickly when we start approaching buy-side accounts,” Evankovich said. “We’re not just a pure Internet site. We recognize the importance of establishing our credibility and operational processes through traditional trading methods, and we’ll transition much of that business to our Web site. We will always maintain phone trading capabilities and support.”
The company said it is backed primarily by Microsoft Corp. employees and alumni with experience in product shipping, security and software development. Though she wouldn’t say how much money BondHub has raised, spokeswoman Kim Robitaille said it is about to close its series B funding round.
“We’ve had some contact with venture capitalists, but have been able to raise enough from individual investors,” she said. “I think we’ll save the VCs for the next round.”
SEATTLE POST-INTELLIGENCER STAFF
Wednesday, August 6, 2003
The 4-year-old Seattle company, with 1,200 users and more than 6,000 bond offerings, will use the money to expand sales and marketing. It plans to add five employees to its staff of 15 by the end of the year, said Vice President of Technology Jeff Thiel.
“Ours is the story of weathering multiple storms,” said Thiel, pointing to the dot-com bust, the Sept. 11th terrorist attacks and the war in Iraq. “Hopefully things are getting back to more of a normal environment.” Total financing in the company, which has yet to turn a profit, is $6.5 million.
Sell Side Technology: Transaction Systems
02 October 2000
SEATTLE–Broker/dealer and software company Bondhub.com is launching a service for trading bonds over the Internet that may save professional investors up to 75 percent in transaction costs. It is scheduled to launch on Dec. 1.
Thomas Evankovich CFA, Bondhub.com’s founder and CEO says: “Bondhub.com is a cross-marketing system. It is targeting a segment with high needs, a segment that is paying significant transaction costs do to a lack of transparency in the bond market. This segment consists of small institutional investors and money managers that have $200 million or less under management.” He adds that these investors are growing rapidly in the US.
“Traditionally, money managers have been making a living by charging a commission. The Bondhub.com platform reduces transaction costs by up to 75 percent by cutting out for example two middlemen which they would get at wholesale level.”
Bondhub.com will act as a market-neutral party between its community of users, providing analytics on bonds and featuring offerings and bids-wanted from broker/dealers. These bonds include municipals, agencies, corporates, treasuries and mortgage-backed securities. Postings identified as firm will be available for immediate purchase while subject postings will allow for anonymous negotiation.
Users will be able to gain access to analytics, news and research, pricing and price yield calculators for free. Data will be provided by Standard & Poor’s, Moody’s, Inter Active Data, Bloomberg, Briefing.com, Tech Hackers and Thomson Financial and other firms that capture information, says Evankovich. Bondhub.com will also have specific bond information, bond analysis tools and market updates.
Evankovich says that Bondhub.com is currently in the process of connecting these trading partners through an API and integrating their systems to automate live pricing, executions, confirmations, clearing and inventory management functions. He does say that Bondhub.com will outsource its clearing to the Bank of New York Clearing.
Bondhub.com will compete with Bonddesk.com, an online fixed income trade platform that is the result of the recent merger by Munigroup.com and Bonddesk. Bonddesk’s trading product also addresses the fixed income marketplace.
Evankovich says the future strategy of the company is to work closely with key partners, which he declines to name, as it goes into its next round of financing. “We’ll take their feedback and develop additional functionality as well,” he says.
Bondhub.com is built in house on Microsoft DNA architecture connecting a cross-matching application for trading fixed income securities, a distributed system for loading inventory offerings from multiple parties, and a suite of tools that enable a trading desk to manage the application, says Evankovich, who notes that the system can handle up to 100,000 transactions a day.
Formed in 1999, BondHub one of the first technology platforms registered with the National Association of Securities Dealers. It has received two rounds of financing and is backed by Microsoft high net worth individuals and software developers, says Evankovich.
Nov 09, 2000, 00:00 ET from The Bank of New York
NEW YORK, Nov. 9 /PRNewswire/ — BNY Clearing Services LLC, a subsidiary of The Bank of New York, announced today that its fully-disclosed correspondent clearing system was selected by BondHub.com, Inc.
BondHub.com, Inc. is building an Internet-based fixed-income trading site for securities professionals. Their soon-to-be-launched trading site will offer investment advisors access to information such as real-time fixed-income offerings, market liquidity, and price transparency. “The success of brokers depends on the quality of their clearing operations. We spent many months researching clearing systems and determined that BNY Clearing was by far the best,” said Thomas J. Evankovich, BondHub founder and CEO.
Jennifer Lewis, vice president of Clearing Operations at BondHub, commented, “Our online trading application required an efficient and flexible clearing partner. BNY Clearing’s advanced technology and full integration with BETA Systems set them at the top of our list. BNY Clearing’s strong technology platform enables us to move forward, knowing that our clearing relationship will grow with us.”
Michael Viviano, CEO of BNY Clearing Services, commented, “We are very pleased that BondHub has selected BNY Clearing Services to support their new venture in a very competitive industry. The fact that they chose us demonstrates our ability to support a variety of different kinds of brokerage firms. We pride ourselves in providing powerful and user-friendly technologies, support services and financial products for the benefit of all our correspondent firms.”
BNY Clearing Services LLC is a subsidiary of The Bank of New York and provides securities clearing, execution, and settlement to broker/dealers, banks and other financial intermediaries throughout the world. It is a member of the New York Stock Exchange and other principal exchanges, the National Association of Securities Dealers, and the Securities Investor Protection Corporation. Additional infe ormation is available at http://www.bnyclearing.com. The Bank of New York was founded in 1784 by Alexander Hamilton and is the nation’s oldest bank. It is the principal subsidiary of The Bank of New York Company, Inc. (NYSE: BK), a financial holding company. With over $75 billion in total assets as of September 30, 2000, the Company provides a complete range of banking and other financial services to corporations and individuals worldwide through its basic businesses, namely, Securities Servicing and Global Payment Services, Corporate Banking, BNY Asset Management and Private Client Services, Retail Banking, and Financial Market Services. Additional information on the Company is available at http://www.bankofny.com. SOURCE The Bank of New York
Sunday, September 3, 2000
By Greg Heberlein Seattle Times staff columnist
“Common stocks had not lost their allure; every speculator who had not been utterly cleaned out in the panic sought eagerly for the hair of the dog that bit him.” – Frederick Lewis Allen, 1931
If Abby Joseph Cohen is the poster girl of the greatest bull market of our time, maybe investors should save a small corner of their display wall for Bill Fleckenstein. Cohen is Goldman Sachs’ chief investment officer. Through thick and thin the past decade, Cohen has issued constructive announcements about the market. To saddle her with a Pollyanna moniker would be unfair. But to say she almost always sees the glass half full, or even fuller, is fair.
If all an investor hears is the upside, then the complete picture is missed. The investor can’t prepare for the worst without knowing what’s there.
Enter Fleckenstein, one of the market’s great entertainers. He operates Fleckenstein Capital in Seattle, writes an almost daily online column for Go2Net’s Silicon Investor and helps the little people–those whose net worth isn’t in the millions or billions–figure out what could happen. The other day, with only minimal coaxing, Fleckenstein mentioned 1930. As in: The latest stock-market rebound, after a big March/April crash, is doing a fine imitation of 1930. After the 1929 crash, stocks fell 48 percent to a November 1929 low. They then rallied for five months, up 48 percent, by mid-April 1930. They then entered a two-year decline that left them 89 percent behind their 1929 high. A classic sucker rally had snagged big money.
“You might say this is the time to get back in as an investor,” Fleckenstein said, parroting the more bullish side. But you wouldn’t include Bill Fleckenstein, either the Paul Revere or Chicken Little of today’s investment community.
Some bull markets come along that are obvious, only no way exists to play them. This may be one of them.
A year ago, seven brokers offered bonds for sale online, according to BondResources.com. By this year’s end, as many as 80 will be selling bonds online. By the end of next year, as many as 160. That’s a growth industry. But many of these are start-ups, or subsidiaries of bigger financial companies, and even if you could invest, how would you isolate the survivors?
One who dearly hopes he can pick a survivor is Tom Evankovich, chief executive of BondHub.com, housed at the base of Queen Anne Hill.
BondHub.com is not designed to sell individuals one or two corporate or municipal bonds. It is for investment advisers, brokers, money managers and mutual-fund outfits with less than $100 million under management. They might have 70 percent of the assets they manage in active stock or mutual-fund portfolios and not have the time to scout bonds.
BondHub.com would offer a trading site, ostensibly with better-priced bonds. The bond market is notorious for building wide spreads into bonds, meaning the seller and/or middleman rakes off a much bigger chunk than a stock investor would tolerate.
A fascinating element is that BondHub.com won’t be fully operational until December, even though Evankovich launched his business in July–of 1999. The complexities of developing systems to handle 4.5 million corporate, municipal and government issues, setting up reporting links to regulators and others, arranging systems to respond to consumer requests is, in a word, unbelievable.
BondHub.com has gone through two private fundings, and plans a third soon, Evankovich said. Already, 30 people are working full-time to get it all together. Evankovich said employment will rise.
It is quite an undertaking, mushrooming on West Mercer.
The reach, the absolute power Wall Street Recap wields never has been so evident. Remember the epic column in early July, when Recap mentioned the book “Richest Man in Babylon” and inveigled all readers to save at least 10 percent of their income?
The results are in, and they are mind-boggling. The government reported the U.S. savings rate was negative 0.2 percent–the lowest since the 1959 onset of record keeping.
Meanwhile we spent twice as fast as we earned money from our jobs in July. We apparently believe that the 20 percent to 30 percent stock-market returns of the past several years are an entitlement, an automatic dividend devoid of the whims of the investment world.
The thought of 1930 never even remotely entered anyone’s mind. It would be irresponsible even to raise the topic.
Wall Street Recap appears Sunday in the Business section of The Seattle Times