Conlon's seed money making hedge funds grow

Brian Conlon's story is a business version of Jack and the Beanstalk. From an initial seed capital investment of £5000, Conlon has seen his company grow from a tiny newcomer in its founding year, 1996, to a worldwide player in 2011. And this growth looks set to continue. Conlon is chief executive officer of Newry, County Down-based First Derivatives, a software firm that recently announced its intention to create 360 jobs over the next three years. Recognized as one of the fastest growing capital markets service providers, First Derivatives provides computer software and consultant services to leading investment banks and hedge funds around the globe. As such, much of Conlon's time is spent on the road and in the air. He was in New York over the St. Patrick's Day holiday where he spoke at the New York Stock Exchange's Ireland Day. And now he is preparing to represent Ireland in the World Entrepreneur of the Year Competition, which will be held in Monaco next month. Conlon's company currently employs over 500 people worldwide and counts many of the world's top investment banks, brokers and hedge funds as its customers, and with the planned expansion it is expected that the number of employees will exceed 900. First Derivatives has operations in, among other locations, Dublin, London, New York, Boston, Philadelphia, Stockholm, Singapore, Toronto, Sydney and Hong Kong. But it was its Newry headquarters that allowed the company to avail of an Invest Northern Ireland allocation of £4.3 million which will be used to help fund the expansion. "This support from Invest NI will help us to execute an aggressive growth strategy that will capitalize on the opportunities we are being presented with from our global client base," said Conlon. Northern Ireland Enterprise Minister, Arlene Foster, sees the money as a critical aid to the creation of quality jobs. "Supporting the creation of high value jobs with salaries significantly above the Northern Ireland average is a key corporate focus for Invest NI, as is encouraging export growth," said Foster. "First Derivatives' investment, supported by Invest NI, combines both of these elements by creating quality jobs to help it target markets in Europe, North America and the Asia Pacific region," she said. Conlon has worked in the capital markets sector since 1990. He trained with KPMG before joining the risk management team at Morgan Stanley International in London. He later joined SunGuard, the NASDAQ-quoted derivatives software house as a capital markets consultant. During his time with SunGuard, Conlon worked with more than 60 financial institutions worldwide. He left the firm in 1996 to set up First Derivatives which today is only one of three listed companies in Northern Ireland that is trading on both the London Stock Exchange and Irish Stock Exchange. So is a company like First Derivatives a good indicator as to where the overall market is going, and if so why? "The capital markets industry is truly global. Global investment in IT infrastructure by investment banks and hedge funds is vast and is expected to grow. This growth follows recent years of under-investment due to the global economic downturn, increased compliance and regulation, consolidation within the industry, and the increasing complexity of trading activities," Conlon told the Echo. "First Derivatives are a relatively small player occupying a specific niche in a vast market. We have significant opportunities for growth across the globe. We have a unique selling proposition in that, through our employees, we combine domain knowledge with technical expertise. As such, we regard ourselves as being at the forefront of Ireland's knowledge economy." Has Conlon noticed a global market up-tick, and what is his sense of prospects even in the face of rising oil costs and other potentially negative factors? "It is clear, he said, "that capital markets have stabilized and are back in a growth phase. Our experience of the recent downturn was that institutions concentrated their focus on risk management, and this actually increased demand for our products and services. In our business, difficult or volatile market conditions present plenty of opportunities." So what's the direction that the company hopes to take in its U.S. operations? "The U.S., Conlon said, "represents a major growth area for the company in both product sales and consultancy services. In recent years we have made some acquisitions in the North American market in the form of Philadelphia-based Market Resource Partners, New York-based Reference Data Factory, and Toronto-based Lake Front Data, as well as increasing our investment in California-based Kx Systems. "To further evidence our intent for future growth in the U.S. we are soon to take re-locate our New York offices to 45 Broadway," he said, that being an address in lower Manhattan's financial district. Is there a limit to expansion, or is the sky the limit? "Fueled by success and market demand we are pursuing an aggressive growth strategy for the business. In the last five years our staffing levels have increased from just under 100 to over 500, and we recently announced the further 359 jobs over the next three years. However, we don't see this as a plateau and will continue to add capacity to the business when it is required." Will Newry remain the company's hub, and if so why? "Newry has a strong sense of entrepreneurship and enterprise," Conlon said. "We are proud of our roots and believe that there is something about the Irish culture which empathizes with other cultures. We can communicate and get on with people across the globe. Newry is ideally located on the border, and, as such, we have excellent links with all the universities in Ireland. Being based in the GMT (Greenwich Mean Time) time zone, we can service our global clients when other locations are closed. "The intense training that our personnel experience in Newry plays an important part of our quality control systems, and we have no plans to change this."

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