Seed Alpha: Why Hong Kong is the ‘fintech place to be’

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The research management solutions company based at theDesk may be aiming for European business but it nevertheless rates our city as the number one place to be

Fintech. The buzzword in the world of business. Financial technology firms are sprouting up across the globe, using new innovations that help the delivery of financial services and compete against the more traditional institutions. And Hong Kong is most certainly home to more than its fair share of fintech companies. One of these is Seed Alpha, a research management solutions company based at theDesk co-working and events space in Sai Wan, Sai Ying Pun and Kennedy Town, which is aimed at financial institutions across the world, with a heavy focus on firms in Europe. However, consultant Tom Clifford says that despite focusing on the European markets, Hong Kong is still the ‘fintech place to be’. Hong Kong is a financial hub with an excellent community. You can thrive here. So it doesn’t matter that the primary clientele for our software solution is in Europe and North America. We still believe in Hong Kong.”

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Seed Alpha is billed as a fintech company that ‘bridges the gap between finance and technology’. It’s primarily for institutional investors who need to ‘solve core problems with their daily work’, covering products that help improve the way research analytics and productivity is carried out. The products ‘help augment investors with technology in a way that truly understands the problems’ in the finance industry. In short, Seed Alpha is a technology platform that helps investors build and manage their research efficiently, thus reducing the time that managers find and organise data. It was launched in Hong Kong in 2013. “Basically,” says Clifford, “we take the research, organise it, archive it, share it and track it. It’s one product, one solution, one system. And the software is really user engaging, so we just manage the back end.”

Clifford came on board with Seed Alpha as a consultant and he’s now one of the guys who heads up the team. Born in Birmingham in the UK, he moved to Hong Kong at the age of seven and was educated here until, after some extensive backpacking, he returned to the UK to begin his career in London. After a number of years in technology recruitment, he says he saw Hong Kong as the right place to ‘build his name’, moving back here to work in the financial markets, initially through FIX Trading Community and then by joining consulting company GreySpark Partners. Seeing the gap in the market for a research management solution, like SeedAlpha, Clifford continued his career as an independent consultant, helping deliver the firm’s product to the global markets.

Seed Alpha is a global company with a development and sales team and even blog writers in cities like London and Hong Kong. Its Asian arm, based at theDesk, was first situated in Sheung Wan but the team chose to move to theDesk because, as Clifford says, ‘it’s perfect for our needs’. Over time, the company has gained more than 25 big global clients, from smaller hedge funds to ‘tier one’ asset managers, who are using, trialling or at least have access to the company’s products.

But it’s mainly about Europe at the moment for Seed Alpha. “We are trying to build up our European capacity at the moment,” says Clifford. “There are new regulations coming in in Europe so we’re really getting involved over there. The deadline is January 3 next year for these regulations to come in so we have to be really fast now to get companies on board with our products.” The regulations in question refer to the new Markets in Financial Instruments Directive legislation or MiFID II. This is the EU legislation that regulates companies that provide services to clients and traders linked to financial instruments like shares and bonds. MiFID I was applied in the UK from 2007 but it’s being revised to ‘improve the functioning of financial markets in light of the financial crisis and to strengthen investor protection’. In short, it’s a golden opportunity for Seed Alpha to sell its software to companies who need to ‘solve core problems with their daily work’. “With these new regulations,” says Clifford, “there’s a greater need than ever before for financial companies to be transparent. Our products help them to organise and account for their research, so they can be just that.”

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Clifford says Seed Alpha was launched in Hong Kong ‘because this is a global financial hub’. He says: “Hong Kong is seen as the perfect ecosystem for new financial tech firms to establish themselves and develop their products in alignment with the market’s needs. As one of the world’s largest financial hubs, the city offers a close-knit community which is always available to discuss and help drive new initiatives. It was through this that we have been able to work with our local clients in developing and trialling a product that’s suitable for their direct needs before launching it in the global markets. Also, there’s a fintech buzz across the world at the moment but in Asia, in particular Hong Kong and Singapore, there’s a huge buzz. These cities have become great environments for fintech companies because of the support from both private and government initiatives as well as there being a variety of financial and technology companies all around. But the competition is fierce in Hong Kong too, so we have to optimise what we do. Frankly, though, it doesn’t matter where you’re based these days. If our clients want help, we’re only a phonecall away.”

“We are trying to expand ourselves,” continues Clifford, “with some of the top asset management houses in the world and go more global on a much bigger scale than we have ever done before. We also want to integrate our software better for our users to tie in with other platforms. Our staff are from Russia, Vietnam, France and Britain. We’re multicultural. We have different ideas and backgrounds which helps make our product so unique. Hong Kong is a great development centre and there’s a fantastic financial community here. It doesn’t matter where we’re targeting in the world. This is the place for a fintech company with big aspirations like us.”

Tom Clifford, in brief:
NAME: Tom Clifford
BUSINESS: Seed Alpha
POSITION: Consultant
AGE: 28
FROM: Birmingham, UK
BUSINESS LOCATION: Rents an office space at theDesk, Sai Ying Pun

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