New York firm InSync Analytics has seen interest in its pre-IPO and SPAC merger analytics offerings pick up as of late, yet the firm’s modeling tools are based on a tried-and-true perspective of the firm’s founders who are supported by a team of experienced analysts.
Co-Founders Pinkey Jain and Gunbir Sethi Gauba met as junior bankers in the global investment banking associate program at JP Morgan. Their collaboration began before the buzz over big data, machine learning and artificial intelligence. Consistently they have sought to provide the industry with forward looking intelligence on key trends affecting alternative asset managers day-to-day investments.
“We believe that effective fundamental analysis is still the human future of alpha generation. Data is increasingly commoditized, with no customization to help identify alpha,” said Jain. “Feedback we receive from clients suggests that all the market data providers out there offer an incomplete financial modeling solution and have issues with timeliness and accuracy.”
To generate alpha, InSync provides an advanced level of financial modeling, analytics and junior research talent. According to Gauba, InSync is the only provider of pre-built financial models backed by granular consensus estimates and human assets.
The offering has been hugely successful, as the level of detail and valuation tools help buyside analysts focus more pointedly on the investment thesis. Now the firm is eyeing additional rollouts this year, the details of which they declined to disclose.
“Disruptive forces within the investment management industry are creating a unique opportunity. It’s become increasingly clear that investment managers have to adapt to new ways of doing business,” said Gauba. “Hedge funds face increased fee pressures, shorter life cycles and junior talent shortages.”
Enter InSync’s dedicated analyst offering. This new service allows them to leverage the firms’ more than 15 years of experience to offer outsourced analyst solutions. They estimate that the business offers a 70%-plus cost savings to managers while offering an efficient turnaround time for data intensive, time-consuming models.
After offering clients a complimentary trial of the outsourced analyst service, they had a 100% uptake of the service.
Having successfully pioneered and institutionalized granular consensus models, InSync is now rebooting buyside financial modeling with the launch of ISTARI (InSync Street Alpha & Research Intelligence), a cloud-based integrated user interface to leverage and deliver high-end pre-built and custom financial models for public and pre-IPO/SPAC companies, and dedicated analyst services to investment management firms including traditional and alternative asset managers.
“As the IPO and SPAC merger market started heating up in mid-2020, offering pre-built plug-n-play models with tweakable forecasts was a natural extension of our suite of financial modeling products,” said Jain. “Our pre-IPO and SPAC merger models are detailed, based on regulatory filings and company presentations, with in-built bull, bear and base case scenario analyses, and valuation tools including discounted cash flows, industry/peer operating and trading comparisons.”
The firm’s clients are mostly hedge funds, which understand not only the power of data, but the power of compiling, organizing and structuring information in a format that allows for key portfolio insights.
InSync markets itself as the only firm that provides a complete suite of financial modeling solutions: InSync Consensus, pre-built company models, mapped datasets, bespoke models and projects, and dedicated analysts. The aim is to offer data standardization for consistency, reliability and accuracy, and data customization for actionable insights.
“Financial modeling is literally in our DNA,” said Gauba. “We have carved out a unique corner in the market through our ability to learn from and evolve with our clients, far outside the traditional world of legacy market data providers.
InSync’s financial models have evolved from the more commoditized, detailed consensus to high value-add company models with mapped, structured historical data and estimates for financial line items and KPIs.
The team now offers real-time data in a customizable or standard format, employing leading edge technology to distribute financial models and data in multiple ways (API, system-feed, ISTARI) as well the more traditional FTP and email delivery methods, for fundamental and quantitative researchers to optimize, and integrate into their analysis.
Besides the service and the technology of InSync, another differentiating factor from both the technology and asset management worlds is that the firm is minority and women-run.
While the industry’s focus on ESG and female entrepreneurship and leadership has grown, for Gauba it is better late than never.
“Pinkey and I are old school investment bankers who worked the notorious 100-hour weeks,” Gauba added. “That lifestyle is definitely not sustainable and harder for women, leading to a higher attrition rate in the industry.” She said that her advice to future women entrepreneurs is the same she gives her daughters — stay on course and give 110%.
She admits that the nature of the business historically has been that women needed to be willing to make sacrifices in order to succeed.
Jain agreed that entrepreneurship in financial services means women should be ready to work hard to succeed.
“At InSync, almost 50% of our workforce is women,” added Jain. “It is gratifying for Gunbir and I to serve as role models for many women. We love mentoring them to encourage success.”
Throughout the firm’s evolution, the goal has remained the same as it is going into 2022: to offer seamless financial models and data processed, presented and consumed the way clients want.
And in addition to working hard to provide that, the team is busily working on new offerings, according to Gauba.
“Without giving too much away, our vision is to enhance coverage, expand our product offering and ramp up our sales and marketing effort,” she said. “We’re also looking to upgrade our technology to deliver models and data more intuitively and with fewer clicks. We see the potential for big wins in the financial market data space, as we look to compete most effectively by using our data and analytics to enhance decision making for our clients.”