Digitising Capital Markets

Yassamin Issapour, CFO & COO and co-founder of agora Digital Capital Markets, talks to Shanny Basar about using DLT to transform capital markets, taking the road less travelled, the importance of synchronicity and funding female founders.

Issapour has not taken the obvious route to founding a company that is using distributed ledger technology (DLT) in bond markets and paving the way for digital securities.

She says, “When most people go left, I go right. That has been very important in giving me tools, such as patience and grit, as the path to success is not necessarily a straight road.”

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Before joining agora Issapour worked at Delonex Energy, a Sub-Saharan oil and gas company focused on exploration, development, and production backed by private equity firm Warburg Pincus and IFC, the arm of the World Bank Group focused on helping build the private sector in developing countries. She had left Barclays Bank in 2017 to join Delonex, despite not having ever worked in the oil and gas sector.

“I was always interested in the sector and the commodity space which, for me, was the perfect intersection of my studies in sustainable development, politics and international relations,” she adds. “There was also a large finance element.”

Yassamin Issapour.

Issapour has a Bachelor’s of Arts in Economics & Sustainable Development from Columbia University in New York. At Delonex she worked on multi-billion dollar acquisitions as well as raising debt/equity financing in Sub-Saharan Africa.

The firm focussed on exploring new oil and gas assets and also bought brownfield assets from large oil and gas companies. Issapour said the brownfield assets gave Delonex the opportunity to foster local communities by providing entrepreneurial skills.

She began thinking about the possibility of tokenising infrastructure assets in the region and using smart contracts to offer them to a broader pool of investors. “It became clear that no banks or infrastructure funds were going to give their loan book to a 25-year old,” explains Issapour.

Coincidentally, Delonex Energy hired Barclays to work on a deal. Issapour had kept in touch with Charlie Berman, chairman of capital markets at the bank, and he reached out to catch up for a coffee.

“Charlie was the first person I told about what I was working on, and I was really impressed that somebody with a 40-year career in capital markets knew a lot about DLT and smart contracts,” she add. “As it turns out, he had left banking and was an entrepreneur-in-residence at R3 applying this technology into existing markets, particularly syndicated bonds; he had met another partner through R3 with the same interest and he asked if I wanted to join agora.”

The UK-based technology company said its software enables the first truly end-to-end digital workflow for the entire lifecycle of a bond, structured product, MTN or certificate through the deployment of its agoraPlatform. Issapour described agora as removing siloed communication and manual reconciliation processes in pre-trade, at the point of issuance, and applying distributed ledgers and smart contracts in post-trade during lifecycle management.

Other fintechs have been launched to digitise bond markets but Issapour argued that agora’s biggest differentiator is that the platform is built on DLT which allows institutions to keep ownership of their data, which is very important for banks. “They are not putting their data into a centralised black box controlled by agora,” she said.

A second differentiator, according to Issapour, is that agora is a front office tool that allows bankers to cover their clients more effectively, with less resources, while clients can use smart contracts to manage the lifecycle of instruments, rather than Excel spreadsheets. Issuers can see where their securities are trading in the secondary market versus their peers, rather than having to ask banks for information. In addition, banks can send pricing updates to issuers in a consistent format; removing the time-consuming process where issuers have to reconcile data that they receive in disparate formats.

“Issuers can iterate on and confirm term sheets as a golden source of information on agora, rather than circulate documents to hundreds of bankers and having to worry about version control,” added Issapour. “Another differentiator is that users are using agora on a daily basis, rather than just deal-by-deal. Other platforms are focused on documentation, but do not go further downstream.”

agora has not been designed for the book building process during new issuance, but the firm plans to interoperate with the book building and allocation platforms that already exist.

Pilot sessions
In February this year agora announced the completion of a series of multilateral pilot sessions of its syndicated bond product, which had lasted for more than eight months.

Charlie Berman, co-founder and CEO at agora, said at the time that the success of these sessions emphasised the benefits of creating a minimum viable ecosystem of users to kick-start true digitisation in primary issuance, and that the significant and tangible benefits of a process-enhancing, time and cost-saving tool were evident to all participants.

Issapour said: “The first series of banks signing up are the names you want to make the market move. I always say we are at the end of the beginning”

The syndicated bond product is being trialled by 14 investment banks and seven of the largest issuers, who issue approximately $250bn of bonds each year. agora is in the final stages of contract negotiations and hopes to have the first issuers on the platform this year. Sustainable finance and green, or ESG, bonds are very important according to Issapour and agora spends a lot of time with issuers and banks who are trailblazers in the field.

“This is a network play so it is a matter of getting mass momentum and moving forward,” she adds. “In syndicated bonds, we would like people to do trades, but also to be part of the daily workflow on banks’ desks by the end of next year.”

Issapour described agora as a product that can apply to any asset class. She says “The first, and hardest thing, is being onboarded by banks, and then we can look at targeted asset class expansion.”

Structured products
In addition to syndicated bonds, the agoraPlatform has been used for structured products. Issapour notes that the first client in structured products reduced time to market for issuance by 90% as the time to generate documentation was cut from hours to minutes.

“Italy, Switzerland, Germany, and Spain are big markets for structured products, so we are very targeted in selling,” she adds. “By the end of next year, we would like to have matured the sales opportunity in structured products. That is less a network play and more about understanding each bank’s situation.”

In April this year Mediobanca said it had digitised its certificate issuance process using the agoraPlatform and significantly reduced the time to produce offering documentation. The agoraPlatform allows seamless digital interaction between different departments and allows all issuance documents, including term sheets, final terms and any other ancillary documents, to be drawn up and finalised automatically.

Marco Pozzi, Mediobanca Group COO, said in a statement: “Through this innovative platform, Mediobanca aims to increase the volume of issuances, and so satisfy the growing demand from its distributors. The adoption of DLT technology also lays the foundation for further automation of the life cycle post-trading, both internally and externally, in an ecosystem that in the future may include central securities depositories and issuing partners.”

Female founders
Issapour is a rare female founder as only 2% of institutional venture money goes to women founders, which she described as “ridiculous.”

“I do most of the fundraising and sourcing, and sometimes, if I bring Charlie in for a meeting, or a call, you can sense a difference in attitude, so unconscious bias is very much there,” she adds.

One of the ways female founders can get more funding is if there are more female investors. Therefore, agora lowered the investment amount for the company in order to open the door to people who could not usually afford to come into the asset class and, as a result, has some female investors in its cap table.

Issapour notes, “Being part of a deal makes it easier to invest in another company, so that is one thing that I can do as a founder.”

She continues that female founders, particularly in Europe, need more funding as more people should be trying to build companies.

“I’ve seen female founders with great ideas, but the step to execution is the scariest one anybody can take, especially if they don’t have a male co-founder,” she adds. “Fostering an ecosystem to fill that gap is incredibly important.”

Issapour had also cultivated an ecosystem earlier in her career by founding Harmony Ventures in 2015 and creating a start-up competition in Bangladesh. On a research trip to Bangladesh she was travelling with students from the University of Dhaka, who she said had phenomenal ideas to fix the development issues but there was no culture of risk capital.

She says, “I realised I had a great network that I could bring to support young entrepreneurs and could also bring capital, and I fundraised from multinationals and government agencies.”

The fundraising amassed $30,000 from international private and public sector companies, educational institutions and NGOs and some ideas were presented at the COP-21 Sustainable Innovation Forum

Her current roles at agora are the first time Issapour has been COO or CFO and she said that a lot of what she did in the early days would not have been possible without her previous work experience – particularly at Delonex.

She says, “Delonex was an opportunity to gain operating experience, which I knew I would need to build a company one day.”

In addition when she met the woman she was replacing at Delonex, Issapour was really impressed and described wanting to be like her as the skill set she had gained, the way she articulated herself, and the work she had done sounded very interesting. Issapour also felt she could learn from Rahul Dhir, Delonex CEO and founder, who had spent time as a banker, about building a company.

“It was a phenomenal opportunity to work in a market that requires a lot of thought and had a potential sustainability angle,” added Issapour.

As part of agora’s ESG strategy, Issapour worked on the firm’s annual sustainability report and took the company through the ISO 14001 accreditation, so it has a targeted plan and environmental management system in place to reach net-zero emissions. agora has completed its carbon emissions benchmarking under Scope 1 and 2 and is going through Scope 3. However, Scope 3 needs a lot of information though the supply chain.

Just as Issapour was impressed with the woman she met at Delonex, she chose to work at Barclays after graduating in 2015 because she was impressed by the three women who interviewed her and seemed counter to the stereotype of people in finance.

“I thought the interaction between markets, people, companies and markets was really cool, so finance seemed like a natural thing to try,” she added.

Issapour had interned at Barclays for two summers in New York, where she had spent her whole life. The bank provided the opportunity to move to London, where it also covered emerging markets.

She believes, “Finance is very commoditised for the most part, while in emerging markets you have to think about bespoke situations as it is harder to get deals done.”

In order to improve diversity, Issapour believes finance needs representation beyond tokenism, and women need champions and allies at all levels.

“One of the greatest things about Charlie [Berman] is that he has been a champion for women during his entire career as I saw what he did at Barclays,” she says.

She highlighted that the finance industry loses a lot of phenomenal talent, both men and women, after two to four years due to both the nature of the work, but also the culture that ignores long-term career growth.

Issapour adds, ”Treating employees like people is definitely helpful and I have seen that starting to happen.”

Her advice to women is to not be afraid of going into finance and to not buy into the stereotypes, as there are great people doing very interesting work. They should also never hesitate to reach out to senior women who can be mentors, as that is very important.

“I have been lucky to work around phenomenal people who are working on really hard problems,” she adds. “My mother, and other women in my family, are very driven in their careers and it has been very helpful to be constantly around people who go after what they want.”

Issapour believes that people have made her successful.

“I see that every day at agora. The founding team came together with an idea but every single employee that we’ve hired is impressive,” she says. “You don’t need to be the smartest person in the room, but you need to be able to like, manage and work with all types of people and learn from them.”

©Markets Media Europe 2022


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