Active vs. Passive SAAS Arbitrage

Published on
September 3rd, 2020
Duration
37 minutes

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37

Active vs. Passive SAAS Arbitrage

The Expert View ·
Featuring Damir Hot

Published on: September 3rd, 2020 • Duration: 37 minutes

As active managers have experienced tremendous pressure to rein in their costs, they've turned to more efficient ways of conducting research and constructing financial models. Canalyst is one of those firms filling this void. Canalyst CEO, Damir Hot, joins Real Vision to discuss how margin compression on the buy- and sell-side has driven a growing demand for cheaper ways to generate institutional-quality research and financial models. Hot sheds insight on the investing decisions of active managers by discussing how Canalyst's offerings have evolved over the past year as discounted cash flow models are going out of favor with risk-free rates approaching zero.  For example, in April, clients were asking Canalyst for cash burn metrics; by June, they were clamoring for data on IPOs. Filmed on September 1, 2020. For additional charts and financial models, click here: https://rvtv.io/3h0aZ8k

Comments

Transcript

  • HD
    Henock D.
    3 September 2020 @ 13:43
    3 0
    Where is Mike Green at for this topic ?
    • AA
      Andrew A.
      4 September 2020 @ 20:01
      1 0
      I find myself saying this about most videos on RV
  • DL
    Dan L.
    3 September 2020 @ 17:50
    6 2
    Sounds like every other pitch I’ve ever sat through from a data vendor. I assume RV is either getting a nice advertising fee or else are actual clients who can attest to the data quality. Tip for the wise: You know nothing until you’ve examined the as-was live data yourself, and by that I do not mean the “historical” data you get from a sales rep who swears it’s exactly what their clients received. (Those oh-so-minor “fixes” matter.)
    • DV
      Daniel V.
      3 September 2020 @ 19:01
      0 3
      Raoul/RV did you get a fee or indirect benefits from this?
    • JF
      Jack F. | Real Vision
      4 September 2020 @ 00:20
      6 0
      No, we didn't get any sort of fee or indirect benefits. I conducted the interview. The very existence of Canalyst is exemplative of a trend (fee compression) that is so integral to the buy-side over the past 10 years. Also, I found it interesting that the products Canalyst delivered were so evocative and representative of broader market sentiment... for example in April (at the peak of insolvency anxiety) everyone wanted cash burn models, whereas during June, everyone wanted models on how to model IPOs. This interview may require special efforts to extract the insights because it's a topic we don't cover that often on Real Vision, but in my view the insights are definitely tangible and valuable if your put in the time. -Jack
  • TR
    Tom R.
    3 September 2020 @ 20:41
    1 0
    How does Canalyst price this service? Which of the major sell side shops use your SaaS based services. Do you change by the seat?
  • DS
    David S.
    3 September 2020 @ 18:43
    5 1
    Current low interest rates are not risk free. COVID-19 will markedly lower revenues especially affecting the over indebted. As revenues decline cash flow to pay back debt declines. If interest rates increase to 2-3% the debt will be more expensive to rollover. This will impact corporations and maybe more so individuals. Insolvencies may stalk the land when the pandemic is gone. I am old so I see things from a different point of view from the young and competent. It is the decline in corporate and private cash flow that is coloring my outlook. To make things worse, I cannot quantify the insolvencies to know the effect on markets or economies. (Canalyst is a great name for the business. Best of luck.) DLS
    • RM
      Robert M.
      3 September 2020 @ 20:36
      2 0
      Another old guy and you are correct. Raoul's insolvency thesis is definitely in play. Low interest rates don't fix poor cash flow. Companies still have to pay off all this debt they are incurring.
  • LC
    Louis C.
    3 September 2020 @ 19:30
    1 0
    Sounds like a helpful tool. Anything like this for retail traders?i know of Simply Wall St & LazyFA but not any others.
  • DS
    David S.
    3 September 2020 @ 17:35
    2 0
    Very interesting. Someone smart will find and fill a market niche. DLS
  • RM
    Robert M.
    3 September 2020 @ 16:56
    1 0
    Is this a product a small family office can use? Don't see any pricing on website.

Chapters

  1. 00:00:47
    Funding Pressures on the Buy-Side
  2. 00:04:52
    What does Canalyst provide for investors?
  3. 00:06:33
    How has COVID-19 impacted the financial research business?
  4. 00:08:58
    Cash Burn and IPOs
  5. 00:12:14
    What have Canalyst clients been asking for?
  6. 00:14:11
    Value vs. Growth
  7. 00:17:56
    Are investors looking at real estate for opportunity - or are they keeping track of their sector risk?
  8. 00:20:00
    Do passive funds use Canalyst as well?
  9. 00:22:34
    What's the value of looking "beyond" the fundamentals?
  10. 00:23:56
    Thoughts on Unemployment and Labor
  11. 00:28:30
    Thoughts on a Vaccine and the Market Going Forward
  12. 00:31:59
    The Future of the Financial Research Industry