Best third-party valuation provider: Interactive Data

Credit Awards Americas 2010 winner: Interactive Data – Best third-party valuation provider

Liz Duggan, Interactive Data

July saw a change of ownership at financial information specialist Interactive Data, headquartered in Bedford, Massachusetts, but in terms of day-to-day affairs it has been business as usual for its evaluations operation. The company, which provides pricing data for over 2.8 million securities worldwide, reported second-quarter revenues of $194 million, up 4.9% on the same period last year.

According to Liz Duggan, the company’s head of evaluations, the increased demand for valuations from the buy-side and sell-side is more than just a consequence of regulatory pressure.

“The regulatory landscape has been and will continue to be one of the key drivers,” she says. “But an even more significant driver has been the sensitivity of the buy-side to valuations. As the buy-side’s interest in this area grows, it encourages greater interaction with the valuation providers. Many of the key initiatives we have been working on have been driven by this process.”

In terms of new offerings, Duggan is particularly proud of the Challenge Portal, which provides a record of how clients and vendors conduct valuation discussions, and the inputs and assumptions being used.

“We wanted to ensure clients have a robust audit trail in terms of their interaction with valuation vendors. We created a management oversight tool so that their compliance teams could have a central repository, not only for how they’ve interacted with a vendor but also the nature of those interactions,” she says.

“It gives them the obvious requirements such as a record of how many times the interaction took place, what the outcome was, what percent did the vendor change or not change,” adds Duggan.

As for the next 12 months, Interactive Data will continue its push into derivatives and other asset classes.