Author: Altin Kadareja

Global ABS 2022 Barcelona Recap

Global ABS Barcelona – Main news and insights from Cardo AI

What are the main insights and news from Global ABS 2022 in Barcelona?

In this article, we will make an overview of what happened at the Global ABS of June 2022, giving you our thoughts at CARDO AI about the main news and panel discussions we took part in. 

Over 4,000 market participants from banks, asset managers, servicers, and technology providers attended the three-day conference in Barcelona with several on and off-site events. From business meetings and panels to informal chats and networking events, we had the chance to discuss the main trends in the industry.

About Global ABS 2022

Global ABS 2022 is the biggest event in the world centered around the ABS and the securitization market. 

Securitizations are still at the top of the agenda for market participants and regulators thanks to the benefit they offer in facilitating institutional investors’ access to real assets and financial assets originated by banks and digital lenders and the opportunity for banks to de-risk their balance sheets and access cheap sources of funding.

 What is happening in the overall structured finance market 

The structured finance market remains solid and is attracting continuous interest from both issuers and investors. The EBA confirmed securitizations as being pivotal for a well-functioning financial system and the evolution of the market central to the agenda of the regulator.

Regarding portfolio performance in the current scenario – characterised by high inflation, rising interest rates, and the spectrum of a recession – all panelists confirmed that portfolios are solid for the moment and that no major increases in defaults have been noticed so far. 

One of the major concerns of lenders is related to inflation and how it will be absorbed by salary increases. The asset classes most at risk under this perspective are considered: (i) consumer unsecured loans, (ii) auto loans, (iii) loans to self-employed, and (iv) mortgages.

The one thing that the current high-inflation scenario is changing however is the risk appetite of cash-rich institutional players, such as pension funds, insurance companies etc., that, according to panelists, are starting to invest in digital lending products, looking for diversification and higher returns on investments. 

Limited growth in EU

The European market has so far lacked the ability to grow and is lagging behind compared to the United States: historically low-interest rates pushed banks to opt for alternative sources of funding reducing supply. On the demand side, difficulties to absorb fixed costs are keeping investors away.

Growth of the synthetic markets

Synthetic markets are growing as there is an increasing appetite from banks for on-balance sheet transactions (that can now be classified as STS) and insurers. The latter are growing their ability to assess credit risk and widening their focus from single names to portfolio exposures. Financial guarantees are the tool elected given their ability to ensure the right level of protection without exposure to mark to market volatility. 

The impact of Basel IV

Basel IV will impact banks with more stringent requirements, paving the way for new SRT deals. 

The role of regulation

After the initial negative attitude to what was considered just regulatory burdens, the market is getting used to STS securitizations and ESMA reporting, notwithstanding the level of regulation imposed on the sector seems to be “unfair” if compared to similar products such as covered bonds

 Italian NPLs

  • The market will continue to be driven by GACS, with upcoming updates 
  • Existing GACS showing a mixed performance with c. 50% ahead of business plan and 50% below, although collections timing are improving after the clogs created during the pandemic is relaxing
  • The traditional methodology of assessing transactions based on comparison with a business plan is becoming inadequate as it is strictly connected to the underlying assumptions and methodology used by Servicers, which become more conservative after the pandemic. Profitability is emerging as an alternative KPI to properly measure transactions’ performance.
  • The secondary market is growing and is expected to be pivotal for many participants in order to manage the liquidity needs

The role of data in the securitization market

  • The increased level of data and information and the standard for data reporting imposed by the regulator has been widely considered a very positive initiative bringing more transparency to the market. This has helped all participants to improve due diligence, thanks to better comparability across different transactions and better credit assessments.
  • On the other hand, many are still struggling in complying with new standards. These standards are in fact considered too detailed (especially when it comes to vintage assets) and the format required is too complex to to be used by investors, resulting in the need for additional custom reporting. 
  • ESMA is currently working on new reporting standards. The new templates are expected to solve most of the issues mentioned above and meet the needs of the market players. There is also the possibility that the templates will be used for more than just regulatory compliance.
  • This includes focusing on data quality rather than quantity: ESMA aims to avoid the need to report to multiple counter-parties and to have one single source of truth. Furthermore, instead of providing multiple views of the same data, the focus should be on loan-by-loan data information leaving to the final user the option to aggregate based on specific needs.

ESG insights for the securitization market

  • ESG seemed to be at the centre of every panel, with most discussions revolving around what is the right level of ESG factors adoption for different asset classes, data availability, regulation, and standardization needs.
  • The need to provide incentives to invest in sustainable assets should find a balance between the impact on the risks perceived (which is not lowered by sustainability per se) and the support for lower economics in order to grant the development of the market
  • The EIF and EBA seem to agree on the direction of ESG securitisation strategy. Independently from the type of approach considered to be ideally superior (sustainable collateral or use of proceeds), market players are favouring the most pragmatic tactics: having a low number of readily available sustainable assets while supporting their creation in the near future. This would most probably incentivise the green transition investments, later enabling securitisation to follow a green collateral approach.
  • ESG reporting and required templates were discussed as a necessary development for the market to have clear guidelines to drive the originators and debtors on providing this information. Such information will have to be provided in granular and robust forms so that the risk of greenwashing can be minimized. As we speak, there were 30+ different standards that market participants mentioned.
  • The focus on ESG has raised new interesting ideas around new markets, such as the solar market, carbon credit intermediation, and green transformation finance.
  • From an investor’s point of view, ESG is a crucial element to be considered not only to evaluate an investment but also to be monitored across the life of all transactions, with the final goal of providing an additional element to drive the investment strategy.
  • From a lender’s point of view, incorporating ESG is very tricky. This challenge becomes even more significant when it comes to consumer lending. For example, in relation to the environmental factors, there is a clear trade-off: it is very difficult to have strict control on how borrowed money is spent without slowing the process and reducing the efficiency – this would mean going back to a more traditional process. What can be done, instead, is to analyze the carbon emission of the equivalent footprint of the portfolios, linking it to the behavior of borrowers (analyzing demographics). Furthermore, when it comes to social factors, the significant trade-off lies between the positive impact generated by lending to people with a poor credit history or low income and the embedded credit risk. 
  • ESG is here to stay, and regulation will soon intervene. The call for lenders is to start to voluntarily report ESG data as soon as possible, to be prepared and get a competitive advantage when regulation kicks in. 

 Technology’s impact on the market

  • The European market has an estimated funding gap of $1 – 1.5tn. As banks are not able to finance it all, this represents a huge opportunity for fintech
  • Fintechs are still considered “subprime lenders” by some market participants given their limited track record (especially during downturns) and their focus on unbanked lenders
  • Technology plays a big role in making this non-bank lender and relatively new asset classes more appealing: better sets of data, accounting integrated software and interactive dashboards with real-time updates on portfolio performance are ways for lenders to gain the trust needed from investors, becoming more institutional, providing better insights than their more traditional comparables with the final result of putting lenders in a better shape to access capital markets.
  • Blockchain can be a game-changer for the industry, helping both the issuance and the management of transactions, although some limits are still seen in matching on-chain securities with off-chain assets

Global ABS 2022 Barcelona: Wrap-up 

All panels and discussions came to the same insights: the market needs high-quality standardized data, and in particular, the need for ESG-related data is becoming more and more relevant. In addition, the market actors that do have the data are struggling to manage it efficiently and take advantage of all the information at their disposal, simply because they are lacking the right technology and tools. 

We have perceived a lack of action in terms of investing in technology that can enable data leveraging. The approach taken by market players is in general rather passive: they expect that some external entity (i.e. the regulator) will set the standards and rules. However, as they don’t get actively involved in the process, what is implemented often does not fulfill real needs.  The situation in Europe looks very different from the US, where financial institutions and investors took the lead and reset the market rules after the GFC hammered the sector and again set its own standards for sustainable transactions without the need for a supranational entity. 

Market actors cannot afford information asymmetry anymore. Considering the regulatory actions in the past few years, data will eventually become a commodity, and only the players that are well equipped to properly manage it and extract valuable insights will gain a competitive advantage in the market.

At Cardo AI, we strongly believe that European financial institutions and investors should change the pace and take a proactive approach in setting data requirements, creating partnerships amongst them and with tech companies in order to enforce and activate this standard. To find more about our technology, check out our dedicated web page.

Beyond Excel: Risks of using spreadsheets to manage your private debt investments

Beyond Excel: Risks of using spreadsheets to manage your private debt investments

What are the risks of using spreadsheets? Is there a better way to manage your private debt investments? Is it worth it to switch from traditional but consolidated processes involving spreadsheets to more advanced technologies?

After reading this article, you will understand the main risks related to the use of spreadsheets when managing private debt investments and explore the real need for modern technologies in the market.

Private debt: a growing asset class

In the last decade, private debt has grown significantly – with an average increase of assets under management of 13.5% each year, according to Preqin 2022 Report. The positive trend is showing no signs of slowing down and is expected to reach $2.69tn in AuM by 2026. 

The main reason for this growth has been the attractiveness of private debt as an asset class. Low volatility, low correlation with other asset classes, higher yield prospects, and the floating rate of loans are only some of the benefits that this asset class can offer.

But operating in the private debt industry has different challenges. Operational structures are complex and very frequently non-standard. By definition, you win when you are continuously adapting to dynamic market shifts with innovative financial and deal structures that are very difficult to standardize. In addition to that, with increased competition for deals, the need for speed and intelligence becomes paramount.

Private Debt Market in 2021

Risks of using spreadsheets: billions of dollars managed with outdated tools

Every day, agents in the private debt market are managing billions of credit investments using spreadsheets, manual workarounds, pdfs, and word documents. 

Spreadsheets have become the go-to tool when managing these complex structures. It is widely used to model data and handle several important processes, from evaluations, pricing, cash-flows reconciliations, portfolio monitoring to capital allocations, and reporting. At the end of the day, spreadsheets are immediate, flexible, simple, and easy to use.While it may seem like an easy and painless solution, there are actually a lot of hidden risks and costs. Let’s take a closer look at the top six risks of using spreadsheets.

The initial purpose of the electronic spreadsheet was to replace paper-based systems in the business world. Originally developed for accounting or bookkeeping tasks, spreadsheets provided users with a simple way of calculating values.

Since their invention, spreadsheets have evolved into more complex products with many features and enhancements, which are now used for a vast array of tasks by millions of companies around the world.

However, spreadsheets were not developed for the investment management industry and even less for the level of security needed in handling data.

6 risks of using spreadsheets for private debt investments

1. Prone to errors and mistakes

88% of spreadsheets contain errors. A small mistake can have a snowball effect and a very big impact on business. At JP Morgan, one single error resulted in a $6 billion loss when someone copied and pasted from one spreadsheet to another. 

When Lehman Brothers collapsed in September 2008, few were aware of one related incident when Barclays Capital almost bought Lehman Brothers’ 179 trading contracts by accident. Lehman Brothers filed for bankruptcy on September 15, 2008. Three days later, Barclays Capital offered to acquire a portion of the US bank’s assets, including some of Lehman’s trading positions. As part of the deal, Cleary Gottlieb Steen & Hamilton, the law firm representing Barclays, had to submit the purchase offer to the U.S. Bankruptcy Court for the Southern District of New York’s website by midnight on Sept. 18.

Barclays sent an Excel file containing assets they intended to acquire to Cleary Gottlieb at 7:50 pm on September the 18th, only a few hours before the deadline. The spreadsheet had 1,000 rows and 24,000 cells, including those listing the 179 trading contracts that Barclays did not want to buy. They were, however, hidden instead of being deleted. 

Cleary Gottlieb was tasked with reformatting the Excel file to a pdf document so it could be uploaded to the court’s website. They didn’t pay attention to the hidden rows, which were visible again in the pdf file. The mistake was only spotted on October 1st after the deal had been approved. Cleary Gottlieb then had to file a legal motion to exclude those contracts from the deal.

Another case involves the outsourcing specialists Mouchel that had to endure a £4.3 million profits write down due to a spreadsheet error in a pension fund deficit caused by an outside firm of actuaries. Not only did Mouchel’s profits take a huge hit, but it also caused their share price to drop and their chairman to resign amid fears they would break their banking agreements.

Axa Rosenberg, the global equity investment manager, was fined £150 million for covering up a spreadsheet error back in 2011.

Documents detailing the collapse of Enron in 2001, released after the conclusion of all legal proceedings, showed that 24% of the corporation’s spreadsheet formulas contained errors.

Fidelity’s $2.6bn “minus sign” error. Fidelity’s ‘Magellan’ fund estimated that they would make a $4.32 per share distribution at the end of 1994. This incorrect forecast happened because an in-house tax accountant missed out on the minus sign on a net capital loss of $1.3 billion. This made the net capital loss a net capital gain. This caused the dividend estimate to be off by $2.6 billion.

More often than not just one person in a company has the knowledge of how the financial spreadsheet models are constructed. Other people are unable to understand and therefore check the analysis. The potential for errors is massive.

2. Vulnerable to security threats

Security risks make spreadsheets inefficient for storing clients’ investment data. Critical information cannot be encrypted with spreadsheets – which exposes sensitive data (financial information, social security numbers, etc.) to security breaches. 

As Microsoft itself underlines on the Excel support pageWorksheet level protection is not intended as a security feature. It simply prevents users from modifying locked cells within the worksheet.”

Excel is not immune to cybersecurity attacks. In 2019, it was discovered that hackers could attack Excel files through Power Query

This is also confirmed by Cisco, which stated that Microsoft Office formats, including Excel, make up the most prevalent group of malicious file extensions in emails, as attackers can use VBA (Visual Basic for Applications) scripts to create macro malware. 

3. No integration capability

Only those with the right form of data can successfully navigate the market, make future predictions, and adjust their business to fit market trends.

There is no doubt about the acceleration of the digital transformation of our economies and our daily jobs. A lot of data is made available to asset managers and asset owners in the private debt market. But most of the data we handle today is unstructured, which means it comes in different forms, sizes, and even shapes. And spreadsheets cannot manage this type of data. 

Excel was mainly built for independent analysis and single files. Mixing data sources that come from different systems is almost impossible to do in excel. Importing, exporting, and updating data from other platforms or databases can become an extremely tedious and time-consuming task. 

4. No real-time update

With spreadsheets, teams are often operating and making decisions on outdated or simply inconsistent information, as infinite versions of the same file are created and saved on each local computer day after day. Furthermore, there is no way of tracking changes to the files – when mistakes occur they can be difficult to identify and correct in time.

5. No permission controls

When it comes to private debt investment data, not all members of the organization need to access the same information. Specific roles and people within the organization need to be able to access a particular spreadsheet, but not others. Spreadsheets don’t come with tools for granting permissions on a single user level. 

Another drawback of Excel is that you have no visibility of who accesses your data and when. A topic that becomes very relevant considering recent GDPR regulations regarding data privacy.

6. Cannot handle large volumes of data

Spreadsheets are not a natural fit for handling large amounts of data. With just ten thousand rows, the program starts to perform poorly and slows down calculations each time a new formula or macro is added.  In other words, the more information you enter into spreadsheets, the more complicated it becomes to manage it all.

Data has always been an essential asset to the growth of any organization. There are 2.5 quintillion bytes of data created every day. Once analyzed, this data can help the private debt industry in a multitude of ways. As in healthcare, data helps avoid preventable diseases by detecting them in their early stages. It could be immensely useful in the private debt sector, to predict different patterns of behavior and increase performance or decrease losses. It can also aid in recognizing illegal activities such as money laundering or fraud cases.

Does any of these issues sound familiar?

If you have ever had to work with spreadsheets to manage your private debt investments, you probably have come across these problems before.

But is there anything better in 2022? What if you could apply the advances in technology and data science to this market? From cloud computing to big data, from machine learning to artificial intelligence, there are many ways technology can make your life easier and better. 

The need for advanced technology in the private debt market

As an operator in the private debt market, you likely have two main objectives: making the right investment decisions and scaling your organization in the most efficient way possible.

However, the tools and technology you are using can have a significant impact on these goals. How so? Keep reading to find out:

Making the right investment decisions

When it comes to private debt, speed is a decisive factor. With the competition going up and fewer deals available in the market, you need to act fast and with confidence.

When using traditional tools like spreadsheets, you spend too much time concentrating on how to get and analyze the data, rather than focusing on what the data is telling you. By the time you get the right information, it might already be too late. How can you make timely decisions when you have data that is several days old?

Scaling the organization

As volume increases, so does operations’ complexity, making it very difficult to scale. While hiring more people is not a sustainable and efficient solution, technology can come to the rescue and support your operations teams with more automated tasks. 

As a result, teams will be able to focus on the operations strategy, rather than crunching and reconciling data in excel files. 

Specific tools for complex activities

When managing private debt investments, there are several critical processes that you just cannot handle efficiently with spreadsheets. Let’s dive into two of the most common activities private debt market actors encounter in their day-to-day: credit risk assessment and reporting.

Credit Risk Assessment for asset managers

When it comes to credit risk assessment for innovative credit products (such as buy now pay later, revenue and inventory financing, salary financing) product-based risk modeling is needed.

Rating classes, risk scores, or probability of default estimations on a yearly basis are not enough. Credit Risk estimates have to follow the structure of the product itself, with the same speed of innovation. 

What market players need are specialized models that target the product risk, such as delay prediction models, propensity to pay back models and revenue limit estimations, etc. This is what enables them to make quick and timely decisions, moving with the speed of the market.

Producing reports for external stakeholders

Private debt reporting needs have become quite complex, especially considering disruptive events like the Covid-19 and the Russia-Ukraine conflict. Asset owners are increasingly demanding more frequent reporting deliveries and more custom-made structures.

In addition, as the asset class grows so does the scrutiny of regulators, which are increasing the reporting requirements with detailed look-through demands. 

To meet these requirements you need to have a flexible approach to data and reporting deliveries. We will look at two examples of common reporting activities: periodic reports from contractual provisions and regulatory reporting.

Contractual provisions require periodic reports that need to be produced monthly or quarterly. In some cases, reports are a prerequisite to making payments or acquiring new assets. Therefore, speed is critical.

In addition, custom requests arrive from time to time, driven by specific external events (e.g. what is the exposure to industries more exposed to the drawbacks of the pandemic? Or towards the Russia-Ukraine conflict?) or even for internal purposes such as investment committees, audit exercises, etc. 

It can become difficult to accommodate such needs quickly by using spreadsheets as they require custom adjustments each time. 

Regulatory reporting (like ESMA transparency reports) is another activity that must be carried out periodically and requires specific processes, standards, formats, and a dedicated tool to produce the report timely and with quality. In some cases, this activity is outsourced externally to third parties that still handle most tasks manually, continuing to have potential errors and data breaching risks.  

Beyond spreadsheets: a better way to manage private debt investments

In this article, we have analyzed the risks of using spreadsheets and the reasons that make them an unsuitable tool for the private debt industry. 

The good news? There is now a better way to manage your private debt investments.

At Cardo AI, we have been working since 2018 to provide asset managers, banks, and digital lending providers with the speed and accuracy they need in the private debt market. 

With Cardo AI’s proprietary technology, our clients and partners are now able to focus on what really matters, on the real work that has to be done: that is taking good investment decisions.

If you are ready to harness the power of technology and abandon your outdated spreadsheets, discover our products today!

Customer success story Cardo AI: Medium size Bank

Our customer success story

Do you want to know how we help our clients to make better decisions and scale their operations? Read our customer success story below!

  • Client

    Medium size Bank in Italy investing in securitization transactions

    Italian medium size commercial bank investing across different Securitization Vehicles (SPVs) in invoice trading, SME loans, Public Administration loans and NPL portfolios

  • Main challenges

    • Calculate concentration statistics across 10 securitization vehicles
    • Monitor contract limits and covenants
    • Digitalize the internal reporting processes
    • Calculate regulatory capital (RWA) for every securitization vehicle
    • Produce STS (Simple, Transparent, and Standardized) of ESMA (European Securities and Markets Authority)
  • The solution

      • Using Cardo AI modern architecture of Equalizer product, the bank was able to onboard €1mn of detailed loan data in only 80 secs instead of 2 hours
      • Eliminated calculation errors and reduced of 5% regulatory capital requirements
      • Drill down functionality to every investment line across SPVs through advanced filtering functionality and allocated every data point in his portfolio in 0.2 secs. Before Cardo AI, analysts spent 3 days to calculate the exposure on a single name level
      • Automatic deployment of STS (Standardized, Transparent, and Simple) regulatory reporting to be provided external investors to the vehicle, complying with ESMA (European Securitization and Markets Authority) rules
  • The Results

Do you want to know more about our products?

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Our 2021 in Review at Cardo AI

2021 Review – What happened this year at Cardo AI

Our 2021 in Review at Cardo AI

2021 review – What happened this year at Cardo AI

As we are starting the new year, we took a look back at what we were able to accomplish during 2021. January is an ideal time to reflect on what we’ve achieved so far and what we expect to do in the months ahead. 

Keep on reading to discover more about how 2021 has been like here at Cardo AI!

Our Key Moments

2021 has been a big year for Cardo AI: we have reached amazing milestones and achievements that have brought us closer to our main mission: revolutionizing the private debt market with technology powered by artificial intelligence. 

Let’s look at some of the major accomplishments of the year:

Our business results

Our technology has helped clients to make smarter decisions, as they are able to analyse quickly more data and gain better insights, lower their operational costs, and further scale their operation. With the same team, our clients are now able to manage 2.5x more assets while encountering 95% less errors. 

  • 30+

    # Transactions

    Alternative Funds, Sub-funds, SPVs
  • 3Bn+

    € Amount

    SME loans, Consumer Loans, Trade Receivables, PA Loans, etc.
  • 600K+

    # Loans

    35 countries, 22 sectors

Becoming a PRI signatory

  • We are 100% committed to promoting responsible investment

    Our mission is to support our clients in having a real influence on sustainable investing and integrate ESG elements into the private debt market. One of the ways we hope to accomplish this is through our future products, which will allow managing ESG scoring and rating data from both external and internal sources. Find more by reading our article about becoming a PRI signatory.

  • Cardo AI becomes a PRI signatory

Talent & People

One of the things we really are proud of is the fact that we’ve had more than 40 new joiners this year, doubling our team compared to 2020. Both senior and junior talents have joined our teams for Business Analytics & Development, Data Science &  Engineering, Financial, Marketing, and Software Engineering. 

  • Reaching 50 talents

    Back in 2018, we started CARDO AI with a small group of people and the mission to bring technology into the private debt market. In September 2021, we reached 50 amazing talents working across three different countries and helping solve the biggest challenges in private debt!

  • Opening new offices

    As we have welcomed many new employees, we also needed to expand our working spaces. We opened a new office in Tirana, Albania (where we now have two) and we moved to a bigger office in Milan, Italy. 

Benefits and initiatives

In 2021 we introduced several new initiatives and benefits for our talents, with the objective of further improving our working environment and making Cardo AI a great place to grow and develop your career.

  • Work-Life balance officer

    We want to make sure that each employee has the perfect environment to thrive & grow in his chosen career. 
    That is why we appointed a Work-Life Balance Officer who, alongside his activities as Growth Manager, will ensure a healthy work-life balance at Cardo and find ways to mitigate and train people in managing stress, burnout, and overtime work. 

  • Remote and flexible working

    Remote and Flexible Working

    At Cardo we give team members maximum flexibility to choose the setup and schedule that works best for them, whether that’s at home, at one of our offices, or at another location. We truly believe that giving our employees the freedom to choose where and when they work best can boost long-term motivation, happiness, and overall productivity.

  • Employee stock option

    Stock option plan

    With our stock option plan we give the opportunity to employees  to become part of the ownership of the company and become a real shareholder of Cardo. 

  • Relocation Package

    We give the opportunity to employees who have been with us for more than a year to relocate to their office of choice, be it Milan, Tirana, or London!

  • Intrapreneurship in Cardo AI

    “Intrapreneurship in Cardo AI” means that our team members can propose new ideas to launch new products, features, or new technologies. If the idea is selected, a side development team is created to come to MVP and production stage.

  • Cardo AI Startup Incubator

    With this initiative we plan to select 2/3 ideas per cohort and everyone that wants to follow any of the startups is free to do so. At the end of the program, both Cardo AI and everyone from our team can invest in the startups, so we all become entrepreneurs.

  • Cardo Kickstart Training Program for recent graduates

    Cardo Kickstart

    We launched the second edition of Cardo Kickstart, a program aimed at supporting fresh graduates in their transition from university halls to the labor market in Tirana.  

Company Trips

We were able to organize two amazing company trips – a great opportunity to connect with each other, relax and recharge for the upcoming challenges! team building and getting to know each other more. Here are some pictures of our two trips, the first one to Drimades, in June 2021, and the second one to Theth, in September. 

One year of tech innovation

  • Virtual Data Room

    We have integrated a VDR system into our Securitization platform, allowing our clients to securely store critical papers, contracts, and data that they are willing to share with a third party.

    Thanks to Cardo AI’s VDR, originators and arrangers of securitizations are now able to:

    • Ensure quality, accessibility, and reliability of data in all the stages of the transaction.
    • Offer to potential investors a fully digital Due Diligence experience.
    • Keep data always up-to-date to grant full transparency.
  • Marti the Chatbot

    With increasing interest and research on Artificial Intelligence (AI), Natural Language Processing (NLP), and machine learning, bots are becoming progressively more efficient. In the fintech market, bots can support the user along its journey on applications, programs, and software. 

    For this reason, in 2021 we launched Marti, Cardo AI’s virtual assistant. Currently, the chatbot is integrated into our digital lending product to guide our users and help them navigate the platform, making it very fast and easy to access information and gain insights on private debt investments and operations.

  • IDP

    IDP is a service that handles Authentication & Authorization, in a focused way, in a cluster infrastructure. This way, we can have a single UserBase for different applications or services while they focus more on providing features and functionalities.

    Some of the main features it offers are:

    • Single Sign-on – This allows a user to access multiple applications in the cluster with the same set of credentials.
    • Granular permissions structure – Roles, Functionalities, Permission.
    • Default Deny – This means that explicit permissions have to be given to each user for everything that they can access.
    • Temporary user access – This feature allows the creation of temporary tokens.

Looking ahead

There are many initiatives we want to carry out this year, starting with the first one in January: The Women in Tech event.

It will be an online event with the objective of underlining females’ contribution to the tech industry, their participation in the tech community along with the challenges they face in becoming part of it. In addition, we want to give emphasis to female entrepreneurship and leadership in technology. Discover more on the LinkedIn page of the event.

We are very proud of everything we accomplished in 2021, and we can’t wait to work towards new goals and achievements in 2022!

Want to stay updated about our initiatives and products? Don’t forget to follow us on Linkedin!

About the author

Altin Kadareja

Altin Kadareja is the CEO and co-founder of Cardo AI. Prior to founding Cardo AI, Altin has covered several investment and risk management roles at BlackRock, Prometeia, Intesa Sanpaolo and Allianz Bank Financial Advisors across different European markets. He holds a master of science degree in Economics and Management of Innovation and Technology from Bocconi University in Milan and followed an executive program in Risk Management at Imperial Business School in London.

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Cardo AI closes another round of funding

Cardo AI closes another funding round of €3.5 million to accelerate the growth plan 

Cardo AI closes another round of funding

Cardo AI, an Italian fintech that develops AI-based solutions for private debt markets, has closed a €3.5 million funding round. 

The capital raised will allow the company to consolidate its offering and strengthen its team while preparing to further expand its operations in Europe and the UK.

Addressing the challenges in private debt data management

Cardo AI is an investment technology solution supporting Institutional investors, banks, and credit servicers to better manage their private debt investments.

The private debt market still heavily relies on manual processes and spreadsheets bringing higher costs, longer times, and high operational risks. Today, institutional investors and asset managers require speed and true intelligence to operate in a highly competitive market. At the same time, the interaction and communication with asset owners, regulators, and other market participants should be transparent and real-time.

Cardo AI technological suite addresses all these issues by offering a seamless and automated data management solution. 

Our mission is to transform how private debt’s investments are managed, allowing a more efficient, faster, and better-connected market

Altin Kadareja

Cardo AI has grown significantly in the last year and asset managers, banks and pension funds are now using this technology suite to manage over €3 billion of assets, more than 20 SPVs, and over 30 transactions.

Cardo AI counts today over 60 talents located in different offices in Milan, London, and Tirana.
The company plans to double its team in the next 9 months and is actively recruiting across different functions in data science, software and data engineering, business development, and operations. 

This new round of investment is a very important milestone for our company. It will accelerate our business growth, allowing us to attract the right talent and serve new clients. We look forward to continuing the pace of change and disruption that we are bringing to the private debt markets, with new innovative products and features.

Altin Kadareja

Francesco Filia, CEO & CIO of Fasanara Capital Ltd, commented on the investment as follows:

Investing in fintech solutions has always been a key driver of our growth strategy.

Cardo AI’s technology is radically changing how alternative investments are managed. Their products enable faster and scalable operations, as well as smarter data-driven decision-making.

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Altin Kadareja

Altin Kadareja is the CEO and co-founder of Cardo AI. Prior to founding Cardo AI, Altin has covered several investment and risk management roles at BlackRock, Prometeia, Intesa Sanpaolo and Allianz Bank Financial Advisors across different European markets. He holds a master of science degree in Economics and Management of Innovation and Technology from Bocconi University in Milan and followed an executive program in Risk Management at Imperial Business School in London.

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Cardo becomes a PRI signatory

Cardo becomes a PRI signatory

Cardo AI has officially become a signatory of PRI, the Principles for Responsible Investment Corporation. Keep reading to find out what the PRI is and what this change means for Cardo AI.
As a younger generation of technology and data science providers our utmost goal is to have a positive impact on changing the investment landscape for good. We aim at becoming the driving force of a new generation of investment managers, that not only complies with responsible investment guidelines, but trusts them. Altin Kadareja, CEO of CARDO AI

What is the PRI

The PRI is an international organization, backed by the UN (United Nations), the lead proponent of responsible investment with the objective to study and analyze the impact of investment decisions on environmental, social, and governance (ESG) factors. The PRI was founded in 2006 by Kofi Annan, who was at the time secretary-general of the UN. Since then, more than 3,600 organizations joined the PRI as signatories, with a combined USD 100 trillion under management. The PRI supports its signatories in the implementation of these factors into investment and ownership decisions.

What it means to be a PRI signatory

The are several types of PRI signatories: 
  • Institutional investors: pension funds, foundations, insurance providers, development finance institutions, sovereign wealth funds, family offices, wealth managers and asset managers (multi asset or single asset)
  • Businesses that service these investors: investment advisors, sustainability/financial consultants, assurance providers, rating agencies, data/research providers, brokerage firms, proxy voting firms and stock exchanges.  
As a service provider and now a signatory of PRI, Cardo AI will deliver services to support and advance sustainability in the investment industry. Specifically, any PRI signatory commits to the following six main principles to guide signatories into the implementation of ESG issues into their decision-making and operations.
  • Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.
  • Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.
  • Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
  • Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.
  • Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
  • Principle 6: We will each report on our activities and progress towards implementing the Principles.

What becoming a PRI signatory means to Cardo AI

This represents for Cardo a big step towards the promotion and commitment to responsible investment.  Our goal is to support our clients in having a real impact on sustainable investing and bring ESG factors into the private debt market. One of the ways we aim to do so is with our upcoming product, which consists of managing ESG scoring and rating data, both from external and internal sources.  As of today, asset managers, banks, and pension funds are still struggling to correctly identify, monitor and report on responsible investment frameworks. With our new technology, creating and managing your responsible investment framework becomes easier, faster, and better. You can analyze, monitor, and report ESG metrics at fund, loan or collateral level. Do you want to find more about our commitment to ESG? Contact us or subscribe to our newsletter to receive insights and news about ESG and private debt.
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