The last of our four videos shot in London a couple of weeks ago was recorded at the offices of Trayport in London to discuss the recent acquisition of Contigo by Trayport. In the video, I ask Mr. Simon Piercy about the acquisition and its likely impact on Contigo and its customers before discussing the background to the acquisition with Mr. Elliot Piggot, CEO of Trayport. I then ask Mr. Piercy about Contigo’s role in the Trayport Complete product going forward and how this may impact the focus on its existing wholesale and retail product suite.
The acquisition creates Trayport Contigo and provides Trayport with a new location in Birmingham, England but more importantly, it gives Trayport a highly credible and experienced development center for mid- and back-office software. Trayport Contigo has been involved in the development of the Trayport Complete product and will now have the responsibility of taking it forward for Trayport. Meanwhile, the acquisition also makes sense to us for the EnTrader suite of products too. Many traders in Europe capture a large percentage of their deals via Trayport and require an ETRM solution to capture a much smaller percentage of trades that are not executed via Trayport.
This usually means an interface to load the Trayport executed deals into the ETRM and then the ETRM is used to calculate positions, perform risk reporting, invoicing and scheduling. In the future, many of these traders may benefit from having a Trayport solution for all trades whether or not they were executed via Trayport. Another benefit will be for Trayport Contigo in the broader European market where they will be in a significantly better position to map Trayport codes for each market – something that they had already started and demonstrated at their recent user group meeting in London and Mr. Piercy appeared to confirm in the recent acquisition press announcement when he said “We believe that combining Trayport’s strength of a proven network of energy trading participants with our innovative and flexible suite of products will deliver significant benefits to both parties and to our clients.”
About the acquisition, Mr. Piggot said “Contigo became a certified software partner for Trayport in early 2013. More recently Contigo has provided expertise with Complete, our post trade product offering for European energy. We are impressed with the quality of their products and service and quickly realised that there was an exciting overlap between Trayport and Contigo across a range of areas.”
Of course, the contrary view may be that users will not want to commit their entire trading, middle and back office functions to a single supplier and the relationship between other ETRM vendors and Trayport may become more difficult as Trayport becomes their competitor and they may argue that Trayport Contigo will enjoy an advantage in terms of integrating with Trayport.
It does remain for us to see how Trayport Contigo’s focus changes in the future and how well they are able to leverage both the relationship with the broader Trayport and with the Complete product.