MBRM buys Cygnifi intellectual property rights

MB Risk Management (MBRM), a London-based financial analytics company, has bought the entire intellectual property rights of JP Morgan spin-off Cygnifi Derivative Services from its bankruptcy trustees.

The software company purchased the non-exclusive assets for a US dollar six-to-seven figure sum to consolidate its position in the market-place, MBRM president and chief executive Mamdouh Barakat told RiskNews. “You are either fully invested in the market you are in or you are out,” Barakat said. “And this we would regard as a further essential item in maintaining our competitive position. We would rather buy the software than let one of our competitors do it,” he added.

The deal was struck in early December, and MBRM has already made a Cygnifi spreadsheet-based multi-currency pricing tool called Aladdin available to its customers via the internet. Barakat said Cygnifi’s web-based derivatives valuation application, Blue Derivatives Pricer, and Vizz Valuation Service, a web-based application developed to help manage portfolios of flow and exotic interest rate derivatives, were also likely to be offered to MBRM customers in the near future.

Cygnifi’s intellectual property was valued at $42 million at the height of the technology bubble, when the company was established as a spin-off from JP Morgan in 1999. It subsequently gained $22.3 million in financial backing in August 2000 from Lab Morgan, JP Morgan Chase’s venture capital arm, California-based internet specialist investor, Sybase, New York-based analytics company, Numerix, and the now defunct Bridge Information Systems.

But Cygnifi’s management failed to bring in further funding and the company filed for Chapter 11 bankrupcy protection in October 2001. New York-based online derivatives service provider Aurora Software bought non-exclusive rights to Cygnifi’s analytics library in February last year for an undisclosed sum. It is unclear if other companies have bought Cygnifi intellectual property on a non-exclusive basis.

MBRM’s deal also includes Kapital Risk Management System, counterparty credit exposure and risk system, Sampras, Collateral Manager, Collateral Heatmap, Jamshidian Swap Market Model, Djinni Swaps Pricer and Mondarian, a profit-and-loss and positions consolidation system.

While MBRM’s deal is non-exclusive, it is unlikely that others will now be able to purchase the company’s intellectual property. Cygnifi’s trustees entered the final round of the company’s liquidation sales process calling for sale agreement contracts to be completed on December 6 last year, with a payment deadline of December 13.