Imagine three banks sitting around a table. Each has obligations to the others. Each has a perfectly respectable reason for being there. Yet, taken together, some of those obligations accomplish remarkably little. They occupy space, require attention and consume financial resources. The interesting question is whether everyone could leave the table with fewer contracts and the economic exposure they actually wanted.
That is a useful way into Capitolis. Founded in 2017, the company works in the machinery behind capital markets, where a bank’s ability to serve another customer can depend on the shape of the trades already on its books. Its proposition has the appeal of clearing a crowded desk: first examine what can go.
- Remove the repetition. Optimize derivatives portfolios across foreign exchange, rates and credit.
- Connect the capacity. Bring banks and institutional capital providers together.
- Watch the conditions. Counterparty participation, acceptable risk and executable structures determine what is possible.
A smaller book. The exposure you wanted.
Consider a deliberately simplified example. Bank A owes Bank B ten units. Bank B owes Bank C ten. Bank C owes Bank A ten. If the obligations are compatible and everyone agrees, the circle can disappear. Thirty units of gross obligations have gone; each participant’s net position remains zero. Real derivatives bring currencies, maturities, legal agreements and risk tolerances. The circle is a teaching device, not a promised result.
Capitolis’s Portfolio Optimization business applies algorithms and coordinated workflows to these kinds of institutional constraints. Compression removes redundant positions. Novation transfers positions between counterparties. Other optimization exercises can add offsetting trades to improve a portfolio against selected measures. The objective varies: less margin to fund, lower counterparty exposure or more efficient use of regulatory capital.
This distinction matters. A trillion dollars of notional removed is not a trillion dollars earned. Notional describes the reference amount behind contracts. Savings depend on the contracts, the institution and the rules that apply. The useful number for a customer is the improvement in its own constraint after the exercise.
There is a coordination problem hiding inside the mathematics. One bank may care most about margin, while another is trying to reduce a different exposure. A change that looks attractive from one desk can be useless to its counterparty. The practical task is to find changes the participants can accept together. That is why a network of institutions is part of the product.
The other side of the crowded desk
Sometimes tidying up will only take a bank so far. Capitolis’s second business, Capital Marketplace, connects financial institutions with institutional investors through structured solutions. Banks bring origination and client relationships. Investors bring capacity and an appetite for particular investments. Capitolis helps put the arrangement together, including documentation, launch and operation.
Its audience is professional: global and regional banks, asset managers, hedge funds and institutional capital providers. A bank considering it would identify an expensive portfolio constraint, examine the eligible positions and work through an optimization or financing solution. An investor would assess the structure, maturity and risk. This is a negotiated institutional relationship, with economics that depend on the arrangement.
That makes the company’s place in the market quite specific. It sells financial technology and services around institutions’ existing activities. Quantile and the triReduce and triBalance offerings are alternatives in optimization. Capitolis’s distinguishing combination is optimization alongside a capital marketplace: improve how resources are used, then help connect institutions to additional capacity.
Three years for the first structure
The founders arrived with relevant experience. CEO Gil Mandelzis had built post-trade company Traiana and led EBS BrokerTec. Executive chairman Tom Glocer had led Thomson Reuters. Fellow co-founder Igor Teleshevsky also came from financial technology. They were tackling a system whose participants already knew the cost of operational mistakes.
Even so, the first structure took three years to launch, Mandelzis told Global Finance in 2022. Proposed solutions were sometimes stopped and restarted. The lesson for other builders is practical: test whether a structure can survive the institution around it before treating a working prototype as a finished product.
“It took us three years to launch our first structure.”Gil Mandelzis / Global Finance / June 2022
The company’s published values favor responsible experimentation and direct feedback. They also compare the workplace to a professional sports team. These are the company’s own statements, but they fit the operational problem: people must challenge an idea early enough to prevent a costly mistake later.
Growth assumptions needed revision, too. In November 2022, CTech reported 37 job cuts, nearly a quarter of the workforce. Capitolis said it had hired for growth that was no longer realistic in the market environment. Risk.net connected the cuts to slower growth in the recently launched marketplace business. Hiring ahead of demand had become expensive.
Buying the network, too
Acquisitions show how Capitolis expanded its toolkit. LMRKTS brought multilateral optimization in 2021. Capitalab, acquired from BGC Group for $46 million in December 2024, added rates compression and margin expertise. By January 2026, Capitolis reported that reductions in rates initial margin and capital had increased 3.5 times since the Capitalab acquisition. That is a company-reported comparison, without an absolute savings figure.
The price of adding rates compression expertise and established relationships.
The next proposed extension is securities lending. On September 29, 2026, Capitolis agreed to acquire eSecLending for $200 million cash. Its asset-owner relationships would broaden the network to which Capitolis can bring financing solutions. The agreement remains subject to approvals and other closing conditions; eSecLending’s European entity is excluded.
On October 6, Capitolis announced $220 million in financing: $120 million of Series E equity at a $1.9 billion valuation, plus $100 million of debt. Citi led the equity round, with Bank of America, Nomura and Tradeweb among the new strategic investors. The financing supports the proposed acquisition.
For anyone buying this kind of service, the sensible comparison starts with the portfolio. Which constraint is binding? How much improvement survives execution costs? Which counterparties must participate? A headline reduction across someone else’s book cannot answer those questions. A measurable result on the buyer’s own positions can.
The transferable idea is to look for capacity hidden in relationships. That requires willing counterparties, reliable portfolio data, workable legal arrangements and acceptable risk. Where those conditions are missing, an elegant calculation cannot complete a trade. Capitolis’s business lives in the distance between seeing an opportunity and getting everyone to sign.