Demand for greater transparency in the fixed income market has seen KP4 Pty Ltd, take a cornerstone investment in Liquidity Cube, an emergent market for fixed income execution and analytics that aims to revolutionise the liquidity matching process.

Demand for greater transparency in the fixed income market has seen KP4 Pty Ltd, take a cornerstone investment in Liquidity Cube, an emergent market for fixed income execution and analytics that aims to revolutionise the liquidity matching process.

KP4 Pty Ltd, is the investment vehicle of Kumar and Kathy Palghat. Kumar was the founder of Kapstream Capital, a business that currently has over A$16 billion assets under management. Kumar now invests in strategic business opportunities through KP4 and sees great potential for Liquidity Cube to challenge the incumbent execution venues worldwide. Kumar will act as a consultant to Liquidity Cube.

“Unlike equity markets, most of the fixed income market trades over-the-counter (OTC). The OTC fixed income market lacks transparency, liquidity and accurate pricing of bonds, while the use of derivatives adds further complexity, making the bond market tricky to navigate in the best of times. Recent liquidity challenges and transparency failings in fixed income markets have highlighted the need for greater transparency and access to improved liquidity,” Mr Palghat said.

“Liquidity Cube offers a solution to this issue. It has been built by finance professionals with extensive experience and understanding of the challenges the fixed income market faces. I am confident the business can utilize new technology and innovative processes to challenge the market share of the incumbent providers, and to reduce the risks inherent in this OTC activity.”

Simon Burges, COO, Liquidity Cube welcomed the investment and said:

“The notional value of the global OTC market is heading towards US$1,000 trillion and participants are demanding greater transparency and more alternatives to generate returns”

“Kumar has been a key participant in fixed income markets for over 30 years. The KP4 investment reflects the belief that Liquidity Cube will thrive as these markets migrate towards more sophisticated platforms for trade execution and analytics. In his dual role as an investor and consultant, Kumar brings a wealth of knowledge to Liquidity Cube and we are delighted to have him join us as we grow our electronic execution, analytics, valuation and data offering”.

The investment from KP4 will allow Liquidity Cube to grow its development team, consolidate its current offering as they onboard the world’s leading banks and buy-side investors, while expanding its valuation service and machine learning driven alternative execution.

About Liquidity Cube

Liquidity Cube, an ASIC regulated market for Fixed Income execution and analytics, was established in 2016 and granted an Australian Markets Licence by ASIC to operate as a Tier 2 Market in December 2019.

Liquidity Cube founders and employees are experienced finance professionals with a track record of building and delivering solutions that have been widely adopted by the financial markets globally.

The Liquidity Cube platform is a cloud-native application.

About KP4 Investments

KP4 Pty Ltd., is the family office of Kathy & Kumar Palghat. Kumar was the founder of Kapstream Capital, a business that currently has more than A$16 billion in assets under management. Janus Henderson took an equity stake in Kapstream in 2015 and completed the acquisition earlier this year. Kumar has had previous careers at the World Bank in Washington DC, as well PIMCO and worked extensively with Bill Gross (of PIMCO) and now focuses on investments under KP4 Pty Ltd.