LMRKTS

LMRKTS, a New York-based financial technology company founded in 2011, specializes in portfolio compression and risk optimization for the financial services industry. The firm was established by Lucio Biase, Hilary Park, and Sandeep Karkera. Biase, a former trader at Lehman Brothers and Credit Suisse, brought deep market expertise, having previously founded and exited another fintech, NetDelta. This background in credit and emerging markets trading informed the development of LMRKTS's core offering.

The company provides a sophisticated service aimed at reducing systemic risk and capital requirements for its clients, which include major Tier 1 institutions, banks, asset managers, and hedge funds. LMRKTS addresses the challenge of counterparty risk, where financial institutions hold massive, often redundant, exposures to one another. By acting as a trusted third party, the firm analyzes the collective trading books of its clients to identify and eliminate overlapping derivatives contracts, a process known as multilateral compression. This service is crucial for managing both cleared and bilateral exposures, particularly for complex derivatives not suitable for standard clearing.

The firm's proprietary algorithms identify these redundancies and suggest new or offsetting trades to reduce overall exposure and leverage costs. This process significantly lowers counterparty credit risk and frees up balance sheet capacity for participating institutions. A key milestone occurred in 2016 when LMRKTS eliminated $430 billion in foreign exchange exposures for six major banks, including Goldman Sachs and JPMorgan Chase, in just 25 minutes. The company's revenue model is performance-based; it earns a small percentage of the total savings it generates for clients upon the successful completion of a compression run.

After receiving a Series A investment from Motive Partners and the International Finance Corporation (IFC) in 2017, LMRKTS continued its expansion. By August 2021, the company was acquired by Capitolis, another financial technology firm, for a sum reported to be over $50 million. The acquisition combined LMRKTS's strength in multilateral compression with Capitolis's capabilities in bilateral optimization, aiming to offer the most comprehensive trade compression solutions on the market. Following the acquisition, the LMRKTS team, including co-founders Hilary Park and Sandeep Karkera, joined Capitolis to continue developing these integrated services.

Keywords: portfolio compression, risk optimization, counterparty risk management, financial technology, derivatives, systemic risk reduction, foreign exchange, FX compression, multilateral compression, trade tear-ups, balance sheet optimization, capital requirements, clearinghouse, bilateral exposures, financial services, investment banking, risk management solutions, fintech, derivatives clearing, capital markets technology