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SL-x

SL-x

Invested
May 2012

Sector:
Financial Services

Headquarters:
Luxembourg

Business:
Financial services technology

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Business at time of investment

SL-x was a start-up company that had developed an electronic trading platform for securities lending by investment banks and custodian banks, built on innovative social networking features that catered to the relationship-based market model.

Investment rationale

The global stock lending market had an average of €700 billion securities on loan in 2011.  It is intermediated by large financial institutions that trade in a bilateral over-the-counter (“OTC”) fashion, primarily through the phone, email and instant messaging systems.  Palamon believes that regulatory reaction to the financial crisis aims to transition OTC markets to a centrally cleared model.  OTC trading is highly inefficient from a capital usage standpoint at a time when banks are being required to allocate more capital to their trading activities.  SL-x’s centrally-cleared electronic trading platform for stock lending offers significant capital and cost savings to banks. 

Value creation

  • Supported the founder-led team from start-up to product launch
  • Signed an agreement with Eurex Clearing, one of the world’s leading clearing houses, for clearing of transactions executed in SL-x in Europe
  • Strengthened management: hired a new CEO and CFO to build out the management structures required for growth
  • Signed LOI with bank owned financial data and analytics provider Markit regarding joint distribution of the SL-x platform to existing Markit customers

Today

In 2014 SL-x gained FCA approval has to commence operating as a multilateral trading facility enabling the company to start commercial operations across 17 European capital markets.