From the Financial Post , Thursday, August 2, 2001

Copyright - Financial Post.

Taking a curious route to success

David Steinhart - Financial Post

Photo: Stan Honda, National Post

Sid Belzberg's software facilitates international trading. Buy a book on computer programming, turn your company into a $25-million business.

Sid Belzberg, a biologist by training, wrote the book on doing just that, figuring out how to develop an electronic trading system to accommodate the explosion of volume in capital markets around the world.

Recognizing the increasing complexity of these transactions, Mr. Belzberg aimed to build an electronic backbone to facilitate global financial trading. He turned his curiosity into Belzberg Technologies Inc., a public company with over 100 employees providing state-of-the-art trading software for financial institutions in the United States, Canada and Europe.

"We make it so one can trade anywhere in the world from one screen," Mr. Belzberg, president and chief executive, said in an interview. "Our systems can allow traders to connect directly to different markets."

The Belzberg suite of trading applications combines interactive order execution and fill reports with live market quotes and analysis, and can include single-order entry, spreadsheet-based basket-trading software and arbitrage launcher. Belzberg servers, capable of processing more than 200 trades per second, provide traders with international connectivity, allowing them to execute trades on exchanges around the world from one screen. As well, Belzberg recently introduced the first-ever American options electronic communications network and electronic connectivity to the five major U.S. options exchanges.

Belzberg's main customers are brokerage houses and large institutions. It rents its product to anyone interested, with most of its business coming from the United States.

"But all of our research and development and product design is done in Toronto," Mr. Belzberg said, adding the company will always stay Canadian.

And while many technology companies are fighting their way through the current economic quagmire, Mr. Belzberg said the slowdown has not affected his firm because it has a small enough market share to be able to remain on the outside.

"All that's happened in the downturn is the cost of hardware has decreased because there is so much used equipment out there," he said. "And I think the slowdown will continue for a while yet, maybe until next year before we see a turnaround."

Belzberg Technologies is expected to hit about $25-million in sales this year. At its last fiscal year-end, the company reported record results, including a 102% increase in revenue to $12-million, up from $5.9-million a year earlier.

After moving to the Toronto Stock Exchange last year, the company announced a share buyback, followed by a private placement for $5-million and capped off the corporate manoeuvring last January by filing to register its shares on Nasdaq.

The company also doubled its revenue every year, Mr. Belzberg said, while operating in a financial services sector where Canadian technology companies have experienced more than their share of success.

And Belzberg Technologies continues to receive good news, with analysts saying the demand for Canadian financial services technology will remain especially high in the U.S., where 49% of Americans own stocks and the money invested in securities has surpassed real estate as the number one asset for investors.

And with a current client roster of over 80 major financial institutions, including Merrill Lynch, Morgan Stanley, ING Barings, HSBC and five major Canadian banks, Belzberg should see its sales figures increase annually.

But besides the big clients, Mr. Belzberg said the company will continue to flourish through word of mouth.

"Most of our business will come from customer references, those who use the product," he said. Not bad for a guy with a curious nature.

Financial Post

dsteinhart@nationalpost.com