A slight change of pace, a series of interviews with interesting people within the Fintech space. First up, Thomas Kim of Enfusion...
Thomas Kim was named CEO in early 2020 to build upon Enfusion’s success as an industry-leading technology and managed services provider to global hedge funds and investment managers. With more than 25 years’ experience in the capital markets, Thomas recently served at Bridgewater Associates for more than seven years, most notably as COO of the investment engineering group. Prior to joining Bridgewater, Thomas held executive roles at various global sell side institutions and fintechs, including managing director at Lehman Brothers, COO at Trading Screen, and CEO at UNX, a digital broker dealer. He also served as CEO at Tassat and held multiple roles at Macgregor and Merrin Financial/ADP. Thomas holds a degree from the American University.
Who are you?
So, I’m nobody. When it comes down to it, I am just a guy that has fortunately been in the capital markets and lucky enough to come across the people who were the firsts. When I was at ADP I acquired Seth Merrin’s Merrin Financial that was the first order management system for the institutional side. When you look ahead, I was the Chief Operations Officer over at TradingScreen before things went awry. They were one of the first execution management systems and I was the guy who raised $100million and just as that was finalising I left to join Lehman Brothers to build out their Electronic Trading franchise. There I acquired Townsend Analytics to help grow their franchise with this interesting technology that was relatively relevant for the buy-side community for multi-asset EMS. I stayed with Lehman Brothers all the way through to the demise and at that point I got into conversations with some folks over at Goldman Sachs who had an investment in UNX. This was at a time when there was no room for small agency brokers as there was not enough flow to go around so I stepped in to figure out how to reconstitute the firm into something relevant that was eventually sold to Deutsche Bank.
I then found myself at Bridgewater as the Chief Operating Officer for the Investment Engine. I found myself in perhaps one of the most interesting places I have worked at with perhaps the smartest set of people located in one place doing really cool stuff. I spent a good seven years there and eventually found myself coming onboard at Enfusion to do more great stuff for the Investment Management community. When you add it up it’s a guy who has been in the capital markets space for a while, the most important thing I have learned is basically perseverance and a lot of what technology can do for an industry that is looking for evolution. Not as a disruptor, but as an instrument that can really help inform and help have impact in their ability to perform their goals.
I hate this, “let’s take the shiny object in the room and try and find a problem that is solves”, versus there are an overabundance of problems and can we look at those problems and figure out how technology can overcome those challenges for the better instead of the other way around.
That’s the perspective I like to bring to the table. I have been a part of the things that we call fintech today that was financial services widgets way back when, to the perspective of the sell-side and the perspective of the buy-side and how there is commonality in terms of how they are all trying to solve similar things. Every once in a while, you come across an organisation with the right kind of vision and the right kind of thinking that is focussed on solving those big deal problems versus trying to sell a widget. Or trying to spin up the next shiny object in the room called technology that everyone gravitates towards and never really quite solves the bigger problems.
So hopefully, based upon a little bit of that perseverance and a lot of that perspective I can bring to the table a perspective to solve those big problems. That’s ultimately what I like to think of myself in terms of what we are trying to do. Or else I just would have stayed at Bridgewater for a very long time and done great things over there on the trajectory of the great things they do.
Hopefully that amounts to something that has been impactful.
Philippe [Buhannic] is one of them, quite frankly a man I adored.
It comes down to the folks to whom I have been introduced, be that a Seth [Merrin] or Philippe or Tarek [Hammoud]. These are folks that have created and done great things.
It has been wonderful to be surrounded by, influenced by these wonderful folks who have made such amazing contributions.
Philippe was a man with an incredible vision, you had to really know him to know he was really onto something. When I left TradingScreen it was a really difficult decision to make. Though he [Philippe] didn’t speak to me for perhaps ten years, we reconnected and it was like we picked up where we left off.
Why am I the CEO of Enfusion now? The reason I took the seat wasn’t to re-create another EMS, or another Order Management System or PMS. That’s not the centrepiece of what it is that we are trying to achieve with Enfusion. The interesting thing that we are trying to do with Enfusion is to solve a bigger problem that goes well beyond just a competitor to TradingScreen or Refinitiv, it’s more than that. And this is the exciting part.
We want to solve the problems that are central to the investment management community.
And some of these problems they [incumbents] have not even got their arms around. So we want to be on the forefront of these things. And what is it? Well, what it’s not, I don’t want to compete with Eze Castle on just an EMS or an OMS, that’s not what we are doing. What I want to do to do is solve based on the inflows of money coming into traditional asset managers and hedge funds. There is this natural disconnect from one side of the organisation and the other. Take for example a traditional asset manager that has institutional money on one side of the spectrum and wealth management on the other. In the past the flow of wealth management money was not particularly compelling, it was bastard child of the traditional asset manager that had all of this institutional money and all of the innovation was within the institutional money side. Now it’s different, you have growing flows of wealth management money and it’s no longer so tilted one way. They are both trying to achieve the same goals yet they are plagued with disparate core infrastructure, technologies and workflows and they don’t have the ability to interconnect and take advantage of scale to achieve their goals. And the same for hedge funds and traditional asset managers. What we want to do through time, is to help alleviate these problems based on one fact:
We have built a front to back, end-to-end, tightly woven ecosystem that goes from portfolio management, accounting all the way down to order management and execution management and trading.
And then wrapped up in a middle and back-office outsourced services. We can solve for this across the organisation and at the same time resolve this crazy Frankenstein model of workflows and the correlating data that traverses from system to system that was created by a best of breed approach that, at that time, was quite frankly the right thing to do. You fast forward to today and that has created a mess, and that around the data. The data is so critical today to drive insights, to drive a better understanding of what to do, to drive a better understanding of the world and trying to apply that understanding to your investment decisions. You need a better way to do this through a single source of the truth data.
Every Asset Manager or Hedge Fund today is ever so tightly aware of what data can do for them. Simplifying their ability to navigate through the data has never been more important than it is today.
We have resolved this, for an organisation that wants to solve this at the root, we can offer an ecosystem that has solved it. We didn’t acquire pieces of the solution, we have the whole solution, we have done elegantly, through the cloud. That’s not a server-side application that evolved through decades, that made it’s way to Azure or AWS and which, all of a sudden, they are now calling a cloud solution. It’s not. We have done it properly from the beginning, whereas these folks coming from a server-side implementation have a single tenant solution that has no ability to do multi-tenant. We are multi-tenant by design and can also do single tenancy, since you can do that when you are a cloud native solution.
The devil is in the details in terms of how these things actually work and we have solved it.
We figured out how to get this to work and our explosion in growth is a direct correlated reaction to the problems we have solved.
This is where the rubber hits the road when you start to think about how people are coining “I have a cloud based solution” yet when you peel back the layers of the onion they don’t really have a cloud based solution, there’s something that has evolved from a server to a desktop to a datacentre to an ASP to now suddenly adoption a partnership with Microsoft or Amazon…
We are very excited by the impact we can have when we look at this at that level and scale. The reaction we are getting from the community has been “Wow, I didn’t know that”. And it has been exciting.
Our industry has been so apt to throwing around buzzwords and eventually throwing around buzzwords with such conviction that people take it for granted and believe it, because they don’t understand what it really means.
Today I don’t think our community truly understand, and we hope to fix this, what a true cloud native solution, alongside cloud computing, how impactful this will be.
Every Asset Manager or Hedge Fund today is ever so tightly aware of what data can do for them. Simplifying their ability to navigate through that data has never been more important than it is today. And that’s before you even get to the next shiny object that people are talking about and that’s AI. That’s another conversation. I think people don’t really understand what that means and people are trying to figure out what to do with it. Cloud is an easier thing to for folks to get your arms around. Covid has been an eye opener to our community to figure these things out.
Blockchain / Distributed ledger technology – in use with your firm? Hype or real?
I think blockchain has a huge opportunity to be impactful in capital markets. I don’t think we are there yet. But if you think about middle and back office processing, blockchain by it’s pure form can help resolve that. You can throw away a lot of things we are burdened with in the middle and back office. It’s way too early for the industry to adopt that, there is still a lot of growth to be done first. We are starting to see opportunities for blockchain in payments, whether through digital currencies or crypto, we are starting to see much more of this. This is happening around us and will make it’s way to the foreground.
Where do you see technology impacting in the next five years on:
- You
- Your firm
- Wider market
I am hoping that technology simplifies the mess. We are running into the fragmentation of systems, the disparate workflows, the Frankensteins, the technical debt and costs associated with these things are becoming untenable, if not already untenable for some organisations. The bigger you are the bigger the legacy technical debt. The bigger the need to have technology solve these problems that are plaguing organisations. It’s gotten to the point where they cannot make moves, since fixing something here breaks something over there.
We measure technology spend like it’s an opportunity, it’s a mess! Technology spends continues to increase but it’s not for innovation, it’s to fix things that are untenable.
This is why I am so excited about Enfusion, we have technology available to solve business problems.
Important Notice: Copyright Alignment Systems 2020
The second paragraph (biography) was supplied by Enfusion as was the picture of Thomas Kim. This interview was conducted remotely over a Zoom call and transcribed by Alignment Systems. No payment was asked for or received either way.
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