Profile

Mark Hemsley is looking to turn Liffe Technology into a software house.

"This is a chance for the tech guys to become the business generators," says Mark Hemsley of Liffe’s new technology spinoff, Liffe Technology. As its first CIO, Hemsley is charged with commercializing Liffe Connect as well as the rest of its systems. But first, there’s a little matter of "transforming an internally facing technology organization into a customer-driven software house."

It has already raised £57 million and partnered with Cap Gemini Ernst & Young and US investment firms Battery Ventures and the Blackstone Group. Liffe Technology also recently signed its first client: Nasdaq, which plans to list its single stock futures market on Liffe Connect.

This is something of a transition for Hemsley. After 15 years of building IT for firms like Credit Suisse First Boston, Deutsche Bank and Greenwich Capital Markets, he is now building technology to sell.

Hemsley started out installing capital markets solutions at Midland Montagu but soon joined Kleinwort Benson to oversee the corporate and risk systems for capital markets. "It was there that I started to specialize in derivatives," he says. At the time, spreadsheets were the primary tool, but they had their limitations: they can’t be the books of record, he says, and they offer little control over data structure, little resilience and no provision for disaster recovery.

Hemsley helped drive the shift from spreadsheets to dedicated systems at CSFB’s Credit Suisse Financial Products division, which he joined in 1990 after a short spell at Bankers Trust. He was in charge of CSFP’s middle-office technology when enterprise-wide risk management was implemented, and he ensured that trade data was stored in reliable repositories along with market data and powerful computational capabilities. However, spreadsheets remained useful "in areas such as exotic trades that just didn’t fit into current repositories."

In 1995 Hemsley jumped ship to head the global markets technology group at Greenwich Capital. "The move was about wanting to run the whole product life cycle, wanting to control the technology from pricing all the way through to settlement," he explains. "We rebuilt everything in-house around a single database" and built a single system that supported trading, enterprise-wide risk management and settlement.

Two years later, Hemsley joined what was then known as Deutsche Morgan Grenfell to head IT for the OTC derivatives group. He was later named managing director of Deutsche Bank’s global technology division.

Now he talks about the ideal client: one requiring global distribution for a sophisticated derivatives product set with high volumes, potentially in transition from open-outcry to screen-based trading.

There are other trading engine vendors, but Hemsley says Liffe has a distinct advantage: "We’ve been there." Perhaps, more importantly, it has made the mistakes. "Losing the Bund contract to the Deutsche Bourse a few years ago was a turning point for us--we learned a lot from it."