IMTC secures VC funding, focuses on SMAs

IMTC, a provider of fixed-income investment management technology, secured its first external funding round, led by venture capital company Nyca Partners, allowing the previously privately funded firm to scale software development and client success teams.

This round of funding will help IMTC expand its software engineering resources, allowing it to improve its optimization engine and expand its list of industry and data connections, with a focus on separately managed accounts, the firm said.

“We’re looking to double and triple our development team, bring on resources here, and that will allow us to scale, to attack the growth we see in the market,” said Russell Feldman, who is the new CEO at the firm.

“It’s going to allow us to capitalize on the opportunity that’s in fixed income, which is such a huge and untapped space, from a technological standpoint,” Feldman added. “It’s been technologically neglected for so long, that now having both the funding resources and partners to work with us to realize this future is super exciting.”

More than 75% of the proceeds will be used to hire software engineers and client success resources who will be deployed to further enhance existing offerings and design solutions in the exchange-traded fund and custom indexing arena. Given that the majority of its clients are muni focused, this funding round will help the firm expand the solutions IMTC offers for muni separately managed account managers. The financial details of the deal were not disclosed.

Feldman believes the partnership with Nyca will be successful, saying Nyca has a massive LP network deep in the space IMTC operates. “Not too many firms have the know-how and the capacity that they do in the fixed-income capital markets arena,” Feldman said.

Over the past year, IMTC has seen an increasing number of RIAs and institutional managers looking to simplify and automate their fixed-income investment processes, he said. Through its cloud-native investment management system, it allows income managers to establish, optimize and rebalance accounts faster and with greater insight, the firm said.

“The client experience is changing as clients are demanding more customization and flexibility from their portfolio managers,” Feldman said. “Asset and wealth managers are being asked to provide solutions that account for investors’ preferences around environmental, social, and governance; socially responsible investment and impact investing, in addition to the more typical (but still individualized) restrictions and guidelines they want in place.”

He said IMTC’s optimizer improves outcomes and lowers costs. A key differentiator, he said, is the flexibility for users to define criteria and preferences in matching portfolios in need of attention with best-fit bonds that are live in the market.

“Our platform provides optimal buy and sell recommendations across hundreds of portfolios in seconds, while accounting for unique guidelines, targets and investment objectives across each account,” Russell said. “Because our technology is cloud-native, this enables the scalability to process the huge amount of data and calculations required to provide optimal recommendations in seconds.”

“Put simply, we’re helping muni managers scale assets and portfolios under management without increasing headcount,” he added.

IMTC has assembled a team that understands fixed-income compared to equity-turned-bond legacy systems, which don’t always work, Feldman said.

“Having the right fixed-income experts and building solutions and thinking about workflows in a dynamic way, we’re able to automate processes,” he said. “One of the things that makes us different is having the right team members in place, allowing us to capitalize on the uniqueness of the markets.”

Feldman said IMTC differentiates itself today in the portfolio optimization space, a tool that legacy providers don’t offer and then don’t necessarily have a solution for.

“This will allow us to continue to build that out and offer that and to adapt that offering throughout the market to satisfy different players in the space,” Feldman said. “Being able to empower different types of fixed-income managers to leverage optimization engine is critical for us now.”

Feldman added IMTC will continue to grow its existing business, and he sees opportunities for the firm in the custom indexing space.

“It’s a market that the fixed-income investors haven’t really touched, and it’s one IMTC is well-positioned to do given the portfolio optimization software it already has,” he said.