It has been a while since I had talked to Beacon, creators of an institutional quant platform that delivers the architectural model of investment bank systems like SecDB at Goldman Sachs, Athena at JPMorgan, and Quartz at Bank of America Merrill Lynch to the broader market. I spoke to Michael Kirch, Chief Commercial Officer, at length about the company, its platform and progress last week. Beacon has recently won a number of awards for its technology and has been expanding its team including the addition of Richard Jefferson as COO. Formerly Global Head of Commodities Trading at Deutsche Bank, he also previously held roles in Commodities Sales & Origination, Energy Derivatives Trading and FX Options Trading and adds to Beacon’s commodities expertise. Now around 50 people strong, 90% of whom are developers, the company is currently building a complete sales team, he told me.
Additionally, the company is making sales progress and has recently won a new deal for post-trade analytics and enterprise risk management with a commodities firm (soon to be officially announced he told me) and has several more in the proof of concept stages. Michael told me that Beacon brings “genuine pre- and post-trade analytics on an integrated and agile platform that is real-time.” The proof of concept approach allows Beacon to work with the prospect to collaboratively prove that the internal development team can really build and deploy what they want. “It becomes the client’s vision of what they can do with the platform and by the end of the POC, they have proven to themselves that they can do it,” he told me.
The whole idea behind the platform is to provide a modern, cloud-enabled, real-time agile environment in which all trading and risk functionality can be developed, deployed and kept up to speed with market, regulatory and business change. Certainly, for trading entities with a penchant for internal development, the platform appears to us to offer an alternative to the build or buy dichotomy of the past by delivering a buy and build environment. Of course, as functionality gets built by Beacon, it will eventually deliver a fully-fledged E/CTRM solution.
Visitors to Beacon’s website will find an endorsement that, to ComTech, sums up the Beacon approach very succinctly. “Other than in-house systems built by large banks, existing commodity enterprise TRM products often require plugins – C#, Excel, etc – to manage and value complex deals. Beacon programmers maintain the core infrastructure, but the transparent source code allows us to customize the platform and develop proprietary pricing models directly in the system. Axpo US is leveraging Beacon to drive our customer business forward by providing a cost-effective solution to price both simple and highly complex deals and manage our risk in an efficient, sustainable manner.” Jeremy Wodakow, Head of Axpo US.