Celebrating a decade of success

Pioneering, entrepreneurial and unafraid to take risks - these are the qualities that have helped a fledgling company flouting an unfamiliar concept, develop into a major player in the financial trading software market in just 10 years. Ashley Mendelowitz, CEO of Peresys, reflects on a decade of success.

Ashley Mendelowitz,
CEO of Peresys

According to Mendelowitz, one of the major factors contributing to Peresys' 10-year winning streak is the fact that it was established by people who hailed from a background in the financial markets. "When the company first started, there was little understanding of how technology could support the trading environment and create a competitive advantage," he recalls. "However, our observation of trends made us realise that, with the right mix of people and product, we could help clients increase their market share through applications and getting them to market quickly."

Peresys' first activity in this area was to develop Hermes, initially a messaging system for fund managers and brokers. The company has since created a suite of products, all aimed at helping both buyers and sellers glean the benefits of electronic trading.

"Interestingly," Mendelowitz notes, "in our early days, we noticed that all our products fell into two categories: either the market was not yet ready for them, or they had to be adjusted slightly in order to add value." Mendelowitz describes this phase of Peresys' as a learning curve, as the organisation came to terms with the fact that it had to wait for the emerging market in which it operated to catch up.

"This created challenges. Often, we had difficulty in funding projects, but more worrying still was that our belief in our chosen direction was severely tested," he admits. Fortunately, morale remained strong, thanks in part to the support received from Peresys' then holding company, Peregrine.

The company also began to realise the importance of diversifying its products and services, so that although it maintained its focus on the financial markets it broadened its product set to include post-trade areas such as portfolio management, integration and securities lending. "As a result, our product offering grew as much through strategy as through the need to create funding for our other products."

Peresys reached a turning point when, in 2002, it took the strategic decision to endorse FIX (Financial InformationeXchange), an international messaging protocol which facilitates electronic order routing and trading through a common standard. The ramifications of this decision were significant: the company was now recognised as a player adhering to global standards, and this, in turn, made it easier to garner the attention of the larger local and multinational investment houses and fund managers.

"In the meantime, products such as Hermes and Slams were achieving a level of dominance in the domestic market," Mendelowitz informs. Today, Peresys enjoys a minimum 50% market share in all areas it is active; a fact Mendelowitz attributes to the company's willingness to take risks and thereby become the first entrants into unknown markets.

"Our relationships with customers have also proved key to growing the business," he adds. Peresys emphasises the value of building partnerships with clients, so it's not surprising that many client relationships stretch back five years or more.

Equally important is the development of partnerships in new areas Peresys believes hold potential. "Rather than reinvent the wheel, we leverage off our partners' strengths, and this has proved key as we venture offshore. Partners like Cameron and Internet Solutions have played a vital role in fast tracking getting a product or service to market"

In all cases, transparency is vital - it's the crucial ingredient for building trust.

This culture of transparency has been built by the Peresys team. Mendelowitz says that the company has "jealously guarded its culture", and although Peresys has grown from five employees to 80, that growth has been cautiously managed.

Where to from here for Peresys? "The environment we operate in has changed dramatically, especially during the past three years," Mendelowitz observes. "Trading is becoming increasingly global in nature, with volumes increasing as it becomes possible to trade anywhere, any time. The type of trading has also become more complicated."

The challenge for Peresys is clear as the trading space becomes more and more attractive to new players: the company must maintain the quality and pace of delivery on which its reputation is built. "We also need to ensure our model remains flexible. With new clients connecting to a Peresys service or solution in the UK, Europe and Asia monthly, we cannot afford a 'South Africa only' mentality - and we need to invest in the people and infrastructure to cope."

The increasing globalisation of the markets means that Peresys must also gear for international expansion, which it is doing by cautiously growing its London based team as well as leveraging the offshore plans of long-standing South African customers.

Another area of focus in the next three years is convergence, with Peresys keeping a keen eye to the possibility of combining existing products in a single offering to create a unique and complete solution. "This will enable us to grow our market share and increase our customer base without relying on significant software development."

At the same time, Peresys is exploring alternative modes of delivery, such as the mobile space, where it is joining forces with Vodacom and Blackberry to launch a solution later this year.

Another goal sees Peresys aiming to cover more asset classes. Having started in equities and established a presence in the bond market, Peresys has since turned its attention to derivatives including single stock futures, currency futures and contracts for differnce. "We feel we need to cover as broad a selection of financial instruments as possible to give customers a full solution across the full trade cycle," Mendelowitz says.

He continues: "Ultimately, our vision is to keep growing the trading community who operate on our platforms. Historically, our greatest strength has been our ability to create sustainable trading communities, and we will continue to do so - both locally and overseas - going forward."