Brainpower offers good news

Rocco Pellegrinelli, chief executive and founder of Brainpower. Brainpower

In a world where high-tech stocks have lost their lustre and software companies have dropped from favour, Switzerland's Brainpower is a notable exception.

The company, which is a global provider of e-finance and intranet financial applications to both online financial service providers and investment professionals, managed to increase revenues by 112 per cent over the second quarter of 2001 at €1.8 million (SFr2.7 million).

Italian-born Rocco Pellegrinelli, chief executive of the Lugano-based group, decided to start up on his own some eight years ago, following a successful career as a private banker in Switzerland.

His mission, then as now, was to develop innovative software for private bankers and asset managers. Pellegrinelli described for swissinfo some of Brainpower’s products.

“Over the years we have developed a number of tools and decision support systems,” he said, which help customers make stock or mutual fund investment decisions. They also help private banks create customer profiles, and analyse specific investment risks, explained Pellegrinelli.

The products offer a combination of database and analysis so private bankers can easily fine-tune a strategy with clients. Also investors can compare funds or stocks with other stocks or funds in a matter of seconds.

That’s what makes Brainpower’s products so popular, Pellegrinelli said.

“This is very high added value for the banks as this is critical software that enables the banks to extend their client base and offer a better service,” he added.

Rapid expansion

Brainpower sells its software products to some 180 clients across the globe, including such giants in the asset-management field as Switzerland’s UBS, ABN Amro and Paribas.

The company has expanded rapidly from just 35 staff 18 months ago to now having some 115 employees in ten offices worldwide.

And it remains one of the few firms developing software specifically for this market.

Why Switzerland

Research and development along with the group’s headquarters are firmly rooted in the lakeside city of Lugano, in the Italian-speaking southeast corner of Switzerland.

“I’ve lived here in Switzerland since 1986, clearly I could have moved elsewhere,” said Pellegrinelli. But the location works.

The location, and Switzerland’s high standard of living, have helped attract good employees, he said.

“We have close to zero turnover with our technicians,” Pellegrinelli said, adding that Switzerland’s experience with private banking and asset management has helped his own company’s image.

Expansion plans

As part of its expansion plans Brainpower went public, launching on Germany’s Neuer Markt last year.

“We opted for the Neuer Markt as we felt that market was the more liquid and more established for high growth technology companies in Europe,” explained Pellegrinelli.

Another important part of Brainpower’s expansion has been its partnership with one of the world’s largest financial information groups, British-based Reuters.

“The largest oartner we have today is the Reuters Group with which we have an agreement for them to sell some of our products in selected countries such as Switzerland, Germany and the UK.”

Business outlook

The past twelve months have been a hard time for many high-tech companies, and the deepening economic slowdown in the United States is expected to cut deeper into their waning fortunes.

However, Pellegrinelli is sure that the worst is over for Brainpower.

“Most of the key corporate decisions on cutting IT investment costs are behind us now,” said Pellegrinelli. “Also because Brainpower produces products for a variety of players we are not particularly effected be the impact on one market niche.”

It seems that whatever the changes in the economic environment Brainpower is ready to develop the software products required by the sector.

“Asset managers and private bankers are going to be more focused on stock picking as they need to bring better results to clients,” said Pellegrinelli.

“On the other hand private bankers need to expand from asset management to wealth management – and this is another area we have developed products in which will help private bankers offer a broader client coverage.”

Analysts across the IT sector agree that the recent shakeout in the industry has left behind the stronger contenders while losing those who just couldn’t make the grade.

Certainly with Brainpower managing to expand its software business at the same time as others went under one can only surmise that this Lugano-based group is among those who’ll be leading the way out of the downturn in the IT sector.

by Tom O’Brien