Business
Risk-transfer architecture, made programmable.
Formation combines a derivatives institution with software and a counterparty network. We are building the architecture through which institutions can design instruments, arrange how risk is funded and held, and manage the resulting financial business.
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Built around the client’s financial objective.
Clients work with Formation’s structurers to develop protection, pursue an investment objective or change an existing book. Specialist AI and quantitative models help investigate alternatives, design structures and assess their economics.
The same financial model carries the work through pricing, counterparty discussions and ongoing management. New quotes or changed assumptions can reopen the analysis without rebuilding the case.
Build the market around the risk.
Event contracts, perpetual futures and established derivatives offer different ways to construct and hedge an exposure. Our software evaluates these relationships alongside funding requirements and investor mandates.
A client transaction can connect to dealer hedges, investors holding selected risks or funded structures. We develop the terms and counterparty relationships together, with the aim of supporting repeatable business and greater capacity.
Make specialist expertise reusable.
Our financial work develops the software. Reviewed models, contract terms and structuring methods become capabilities that can be used across subsequent assignments.
This reduces the specialist work required to arrange and manage each transaction. A small team can serve more complex business, including client needs that would otherwise cost too much to address.
Connect private exposures to shared markets.
Company operating results are our first application. A common public reference can support institutions with different private exposures and investment objectives.
Formation assesses each institution’s needs against that reference. Related contracts can provide pricing comparisons and possible hedges, while repeated reporting periods support continuing programmes. Each client’s analysis remains specific; the market and reusable financial methods can serve many participants.
Software on which institutions can build.
Other brokers, dealers and investment firms will be able to license Formation for their own clients and private books, including business originated elsewhere. They can develop programmes and manage positions using the same financial capabilities that support our own institution.
Our commercial model combines income from financial programmes with software licensing and usage. Formation can grow through the business we originate and through other institutions running more of theirs on our software.
The platform behind the business