The origin of ArbMaker software dates to 2007 when its precursor was created by the privately held, long-only investment firm Sparrow Holdings, LLC. The driving force was disquiet at the then prevailing equity valuations – the two principals decided to add a new methodology to their trading stable in order to mitigate market risk. It started in excel and, as things turned out, was a good decision.
Over time the package developed to its current form due to the decision to finance it via commercialization. Clients ask sometimes why that route was taken since the software is unique in the market, based on a robust statistical procedure and backed up by a large body of academic research papers. The answer is pretty simple: ArbMaker is a set of tools not a Magic Bullet – its users still have to do a bit of work.
The two principals of Sparrow Holdings trade with this software and that remains their primary activity. They combine extensive experience in economic and financial analysis with equity trading and are graduates and post-graduates of the the London School of Economics & Political Science and the University of South Carolina.