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You have to know how finance works’

Last update - Thursday, August 14, 2008, 00:00 By Metro Éireann

In the latest instalment of Metro Éireann’s MEET THE BOSS, SANDY HAZEL speaks to Hakan Guzelgoz of Koelo, provider of sophisticated financial trading software

With French and Turkish parents, Hakan Guzelgoz has an international pedigree that works to his advantage in this globalised era. Having lived and studied in Istanbul and Toulouse, he speaks French, Turkish, Italian and English. Other credentials are degrees in engineering, mathematical science and financial services.
One of Guzelgoz’s first positions on leaving college was as a junior quantitative analyst with Dutch bank ABN Amro. This involved building portfolios for the bank by selecting assets “that could be invested in a specific manner using mathematical analysis”, he says. Guzelgoz explains that this is a way of working out how to minimise risk in investments while maximising returns. “It’s like not putting all your eggs in the same basket really.”
Guzelgoz then moved to Dublin, where he worked for a time with MPS Asset Management, another investment company. “This was an interesting time for me as that company was a start-up in Ireland and I could see how they were going about it,” he says. “I was head of research and development and was in Dublin to help set up structure and software. The company grew from eight people to over 40. It was a great challenge.”
It was while at MPS that Guzelgoz met Stefano Rocco, head of IT. “We worked a lot together then, and we decided to set up our own company,” he says. The pair had collaborated on a programme related to financial trading for buying and selling assets. It enabled brokers to transact within seconds, and they saw that it had a market beyond the company. “We knew we could sell products related to this and we spoke to the company management about using it.
When we made the split MPS became one of our first clients.” Office space for the new company, Koelo Technologies, was sourced at a business centre attached to the National College of Ireland, and financed with money from private investment. “It is proving a good location for us,” says Guzelgoz, “because it is directly adjacent to the Irish Financial Services Centre (IFSC). The fact that we are connected to the centre adds to our identification with clients.”
Koelo provides licences to clients to use its sophisticated trading software, but retains the source code. This enables the company to market the product while protecting it, as it is not possible to patent software in Europe. “It’s more like a service we provide,” explains Guzelgoz. “You own the copyright and the intellectual property but it is not really called a patent.”
Guzelgoz and his partner Rocco visit financial service companies to impress upon them the value of their software and to sell. “We prefer direct connections with clients who are fund administrators and asset managers,” he says. “We have a saleable product, software applications that enable clients to connect and trade in a real-time way.”
When asked to explain funds, Guzelgoz says that they are basically a group of people who decide to pool their money together to put into a particular company. “If, say, a hundred people put their euro into a project, it creates a fund that is going to be more effective and profitable than each of those hundred people investing individually or directly. Asset managers help to create these funds and work them.”
Governments and countries need these funds and they are encouraged, with favourable taxation, so that “people won’t leave their money under the mattress, so they will put their money into markets, invest it and use it to grow economies.” Guzelgoz intends to capitalise on this process.
Koelo now employs five people and retains a manager from MPS on the board. “We have also had much support and funding from Enterprise Ireland,” says Guzelgoz, who appreciates the mentoring available, and says that the contacts provided were invaluable.
Another advantage to doing business in Ireland is the fact that it is the only English-speaking country in the Eurozone. But Guzelgoz says that there is a potential downside in that graduates in financial services are scarce. He points out that his background in information technology and financial services gives him an edge that many other software suppliers do not have.
“For IT to work well in finance, you have to really know how the finance industry works, and finding graduates with skills in both fields is rare. So when it comes to recruitment of these graduates it is a very competitive market.”

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