Bucking the trend

Risk: As 2009 draws to a close, how has the year been for OpenLink?
Kevin Hesselbirg (KH): It has been a good year overall - despite the downturn in the economy, we have made a lot of significant investments in our people and in our distribution capabilities. Things are pretty stable and we expect to be able to eke out a double-digit growth increase. That follows a compound annual growth rate of 35% over the last three years.
We have also grown our staff from around 650 a year ago to 800, and added a new office in Singapore, bringing us to a total of nine offices around the world. We learned a lot of lessons from the last recession and the post-Enron demise of the energy markets - during these slower times we can take the opportunity to secure ourselves some quality people and invest in the future.

Risk: What are some of the key projects you have undertaken this year?
KH: We continue to see commodity trading and logistics shifting to the global stage. Our customers have to consider their global opportunities across all of the geographic boundaries, and that increases the level of complexity significantly around physical transportation issues. We particularly see that with crude, coal and liquefied natural gas, as well as other bulk commodities such as metals, concentrates, softs and agriculture products.
Global traders have to consider physical factors such as production, storage and transportation, and not just price, volume, and so on - this creates a massive amount of optionality in the value chain - both in risk and opportunity. We work to facilitate those market views, providing our customers the ability to maximise their opportunities across both the physical and the financial factors. We offer truly integrated risk management, considering the complete energy value chain, and that continues to be a big focus for our customers.
We also see markets driven by the continuation of higher-volume trading and the need for ever-more complex calculations and analysis produced in less time - and our product development strategy reflects that.

Risk: What is your flagship product?
KH: We have two flagship products: Findur and Endur. Findur is primarily the platform for typical capital markets instruments, and Endur is for commodity instruments. We think of them as being two products but, technically, they are a single software solution, appropriately parameterised for our target markets.
These are portfolio management solutions, allowing trading firms to manage all the underlying risk associated with trades. But they also help mitigate the overall operational risk by having everything in one system, energy, commodities, capital markets and so on. So, if a trading strategy includes a number of asset classes, such as a physical commodity offset with a financial hedge, whether it be an alternative commodity, equity, credit, foreign exchange or an interest rate hedge - that entire basket of trades is analysed and monitored together as a single strategy. Without a unified solution such as ours, you may have traded that same strategy, but had to bifurcate them, or put all those trades in different systems and then you lose the underlying ability to risk-manage that position.