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Evan Harp sat down with VettaFi’s Head of Index Products Brian Coco and Head of Fixed Income Products Samarth Sanghavi to discuss the recent acquisition of Credit Suisse Indices from UBS.
Evan Harp: Can you tell me a little bit about how this acquisition came about and why it is useful for the partners that VettaFi serves?
Brian Coco: To give you a little background, both Samarth and I worked on the team that created these indices at Credit Suisse. I started working on them in 2001 and Samarth joined the team in 2010. So we have a lot of history with these indices.
When the opportunity came about to potentially acquire them, we jumped at it. There are not that many bond index businesses out there. It's a small competitive space dominated by four or five firms. So this was one of the last potential acquisitions available that had history going back 25 years.
Evan Harp: VettaFi’s index team has a reputation for its work in the equity space, can you talk about how this expansion into fixed income will benefit our clients and partners?
Brian Coco: Our clients have been sharing for a while with us that they are looking for a partner on the Fixed Income side that delivers what we aim to do in Equities in terms of product innovation, speed to market, and attention to detail. They often choose us as a partner not just because of our ability to quickly customize and develop new products for them, but ultimately because of our ability to help educate investors and promote their products. We help explain to their end investors the benefits of using that particular index.
We knew we could take some of those same concepts and frameworks that we built for equities and roll them out to fixed income. The fixed-income space hasn't seen quite as much innovation as there has been on the equity side. We think we can put a lot of the work we've done on the equity side to good use here.
Evan Harp: You mentioned that you have a history with these indices from going all the way back to 2001. Can you talk a little bit more about what your role was back then? Did this opportunity come about because of that history, or is this just a happy coincidence?
Brian Coco: I was hired onto the team in 2001 as an index research analyst focused on gathering and organizing all the data we would need to build advanced bond analytics. Big investment banks would build these indices as a soft-dollar service to their trading clients. It helped them do more advanced portfolio analysis and performance measurement.
Once we made the decision that we wanted to be in the Fixed Income Index business, asking UBS if they would consider selling us the indices was a no-brainer. I also couldn’t be happier to bring Samarth on board to partner with clients on growing this franchise.
Evan Harp: Samarth, what are you most excited about in regard to this acquisition?
Samarth Sanghavi: I am really excited to be able to work with the products that Brian and I developed many, many moons ago. Frankly, as Brian mentioned, the remit at an investment bank is to develop indices that can help grow our trading volumes. That often meant that indices were supporting the larger business, as opposed to being the revenue drivers. For me, it’s exciting to join an organization like VettaFi, where our core focus is serving clients through innovative products and developing a sustainable business powered by our index products. My goal is for VettaFi to become the premier shop that clients can rely on as a key partner.
Evan Harp: Samarth, you also have a history with these products, can you talk about your career and what led you to become part of VettaFi?
Samarth Sanghavi: I started my career at Lehman Brothers as a risk analyst. A few years into the role, I went back to school to earn my MBA. After that, I worked as a trader at Bridgewater Associates. Post-Bridgewater, I joined Credit Suisse in the Index Strategies team. I started out as an Associate on the team, and by the time I left the bank 11 years later, I was running the global Fixed-Income business on behalf of the bank.
Evan Harp: Let’s talk about that 25-year history of these products. Can you speak to what that history means and why it's really interesting and useful?
Brian Coco: Not only do most of the products go back to the late 90s, but most of them were constructed in the early 2000s. They have not just a long history, but a long live track record of being computed and being modeled to represent those individual markets. I think there are only a few other products out there in the space that have that depth of history, especially in High Yield.
What's unique about this particular set is that it's not just the main index levels, but all the deep analysis underneath the covers. You can slice and dice the indices by ratings, sectors, maturity buckets, regions, countries, and other relevant aggregations.
The product line covers government bond indices in over 30 currencies. It covers corporate bond indices in major currencies, including investment grade and high yield within emerging markets - it actually covers credit really well as well. It's quite a broad offering that we're bringing to the table.
Evan Harp: In this particular market moment with where the fixed income space is, is there anything else that people should be aware of about these indices?
Samarth Sanghavi: These indices were designed to represent the market. As Brian said, they've been built in a flexible manner so they can be sliced and diced to cater to clients' custom portfolio needs. For those looking for high-quality benchmarks or looking to build bespoke exposures in Fixed Income, VettaFi has the capability to not only create that slice but to create that slice on an index that has a very long live track record so you can benchmark that to your products.
Evan Harp sat down with VettaFi’s Head of Index Products Brian Coco and Head of Fixed Income Products Samarth Sanghavi to discuss the recent acquisition of Credit Suisse Indices from UBS.
Evan Harp: Can you tell me a little bit about how this acquisition came about and why it is useful for the partners that VettaFi serves?
Brian Coco: To give you a little background, both Samarth and I worked on the team that created these indices at Credit Suisse. I started working on them in 2001 and Samarth joined the team in 2010. So we have a lot of history with these indices.
When the opportunity came about to potentially acquire them, we jumped at it. There are not that many bond index businesses out there. It's a small competitive space dominated by four or five firms. So this was one of the last potential acquisitions available that had history going back 25 years.
Evan Harp: VettaFi’s index team has a reputation for its work in the equity space, can you talk about how this expansion into fixed income will benefit our clients and partners?
Brian Coco: Our clients have been sharing for a while with us that they are looking for a partner on the Fixed Income side that delivers what we aim to do in Equities in terms of product innovation, speed to market, and attention to detail. They often choose us as a partner not just because of our ability to quickly customize and develop new products for them, but ultimately because of our ability to help educate investors and promote their products. We help explain to their end investors the benefits of using that particular index.
We knew we could take some of those same concepts and frameworks that we built for equities and roll them out to fixed income. The fixed-income space hasn't seen quite as much innovation as there has been on the equity side. We think we can put a lot of the work we've done on the equity side to good use here.
Evan Harp: You mentioned that you have a history with these indices from going all the way back to 2001. Can you talk a little bit more about what your role was back then? Did this opportunity come about because of that history, or is this just a happy coincidence?
Brian Coco: I was hired onto the team in 2001 as an index research analyst focused on gathering and organizing all the data we would need to build advanced bond analytics. Big investment banks would build these indices as a soft-dollar service to their trading clients. It helped them do more advanced portfolio analysis and performance measurement.
Once we made the decision that we wanted to be in the Fixed Income Index business, asking UBS if they would consider selling us the indices was a no-brainer. I also couldn’t be happier to bring Samarth on board to partner with clients on growing this franchise.
Evan Harp: Samarth, what are you most excited about in regard to this acquisition?
Samarth Sanghavi: I am really excited to be able to work with the products that Brian and I developed many, many moons ago. Frankly, as Brian mentioned, the remit at an investment bank is to develop indices that can help grow our trading volumes. That often meant that indices were supporting the larger business, as opposed to being the revenue drivers. For me, it’s exciting to join an organization like VettaFi, where our core focus is serving clients through innovative products and developing a sustainable business powered by our index products. My goal is for VettaFi to become the premier shop that clients can rely on as a key partner.
Evan Harp: Samarth, you also have a history with these products, can you talk about your career and what led you to become part of VettaFi?
Samarth Sanghavi: I started my career at Lehman Brothers as a risk analyst. A few years into the role, I went back to school to earn my MBA. After that, I worked as a trader at Bridgewater Associates. Post-Bridgewater, I joined Credit Suisse in the Index Strategies team. I started out as an Associate on the team, and by the time I left the bank 11 years later, I was running the global Fixed-Income business on behalf of the bank.
Evan Harp: Let’s talk about that 25-year history of these products. Can you speak to what that history means and why it's really interesting and useful?
Brian Coco: Not only do most of the products go back to the late 90s, but most of them were constructed in the early 2000s. They have not just a long history, but a long live track record of being computed and being modeled to represent those individual markets. I think there are only a few other products out there in the space that have that depth of history, especially in High Yield.
What's unique about this particular set is that it's not just the main index levels, but all the deep analysis underneath the covers. You can slice and dice the indices by ratings, sectors, maturity buckets, regions, countries, and other relevant aggregations.
The product line covers government bond indices in over 30 currencies. It covers corporate bond indices in major currencies, including investment grade and high yield within emerging markets - it actually covers credit really well as well. It's quite a broad offering that we're bringing to the table.
Evan Harp: In this particular market moment with where the fixed income space is, is there anything else that people should be aware of about these indices?
Samarth Sanghavi: These indices were designed to represent the market. As Brian said, they've been built in a flexible manner so they can be sliced and diced to cater to clients' custom portfolio needs. For those looking for high-quality benchmarks or looking to build bespoke exposures in Fixed Income, VettaFi has the capability to not only create that slice but to create that slice on an index that has a very long live track record so you can benchmark that to your products.
