E-commerce boutique targets fund managers
A Hong Kong-based e-commerce boutique consultancy, eMergent Technology, will start marketing its services to fund managers in Asia in the second quarter this year to provide trading, research and position management systems, says CFO Marshall Mays. The company has been in existence for about 18 months and is building business with companies in Asia, including financial services companies. “The buy side is a late adopter of technology, so we’ll go after it only once we’ve announced more clients,” Mays explains.
The firm is run by David Brickler, president and CEO, an American programmer with 18 years of Asia experience whose previous role was IT vice president at Goldman Sachs; and Hong Konger Gary Yeung, chief technology officer and a former IT hand at Credit Lyonnais Securities Asia and ABN AMRO. Mays, an American with 15 years in Asia, was Asian strategist at the now defunct Nikko Securities.
eMergent’s client roster is largely companies involved in the Greater China market, although the greatest prospects for growth are in Japan, whose companies are now embracing IT with ardour.
eMergent began advising clients on technology issues, particularly strategic decisions regarding how and when to use the internet. It also sells its own software. The firm has scored a number of successes because Asia-based venture capital firms have “no clue” about the internet, Mays asserts. “Most VC firms jumped into tech two years ago because it was hot, but they had no idea what they were doing. That’s why success rates have been worse in technology – not just because of the tech boom and bust cycle but because analytic skills in technology still aren’t developed here.”
One client Mays can name is One Resource Limited, a joint venture between Jardine Fleming and Cap Gemini that offers a web site to facilitate procurement by companies for a range of business requirements. eMergent prides itself on technology that, for example, allows different companies to interface simultaneously in different languages. It also provides modular systems that adapt to a client’s existing standards. Mays says these are basic concepts often overlooked in Asia because both clients and IT vendors aren’t experienced with the internet.
Fund managers are the next target. Mays believes buy-side analysts still lack the same information and tech found at brokerages. eMergent wants to advise them on how to control risk and provide systems to facilitate buy-side decision making. “Fund managers need more analysis of systematic and company risk, even the traditional bottom-up managers. Penetration in Asia of this kind of technology has been slow. Japanese firms appear to be big on quantitative risk control but only superficially – they buy the research tools but then don’t use them.”
In addition, eMergent is looking to move into direct equity. Its corporate clients include some of Asia’s leading IT infrastructure companies. Mays believes the groundwork Asian companies have laid for the internet over the past year is superior to that assembled in the US five years ago. The company is looking to close one or two deals to acquire stakes in some of these companies.