What are the advantages of having established ISAM Capital Markets, the group of companies which includes IS Prime, IS Prime Hong Kong and IS Risk Analytics?
Rather than having three separate businesses in three different continents, it made sense to consolidate the organisation into a broader structure whilst allowing each business within the group to flourish on its own. The consolidation enables all three businesses to benefit in terms of operational costs and from having an over-arching management team. Within the group structure, each separate business has its own area of expertise, retains its own integrity and operates independently, benefiting from complementary business opportunities when appropriate.
Where do you see the biggest growth opportunities in the group?
The biggest growth opportunity is undoubtedly in Asia. We have spent the last few years establishing ourselves as market leaders in our respective areas and growing a broad base of non-Chinese clients. We are now ready to steadily focus on China, investing more manpower and resources into the region. We are in a strong position to nurture smaller brokers in the region and educate the market. It is a huge advantage to have an office in Hong Kong, a Chinese speaking team and a broad offering which includes risk management services from IS Risk Analytics.
You have a very experienced, high quality team and are continually expanding across all three businesses. What are your team expansion plans and how difficult is it to find the right calibre of people for the businesses you are in?
We have very ambitious growth plans across all three businesses so finding the right calibre people to join our teams is essential in order to achieve these plans. Recruitment is a constant and key focus and we are actively hiring in all three geographies for a wide range of roles, from sales through to technology specialists. We are a collaborative and close-knit team so it is vital that anyone who joins the organisation not only has the correct skillset, academic ability and industry experience but also conforms to the ISAM Capital Markets group philosophy. We only employ people with the right chemistry and who we believe will operate effectively within our team-focused environment.
How do you and Raj Sitlani divide your responsibilities for running IS Prime?
I guess the simplest way to describe it is that Raj is responsible for all aspects of the business relating to cost and I am responsible for bringing in revenue. This means that Raj’s role is essentially running the day-to-day business while my principle responsibility is growth.
As Directors, we are jointly responsible for interfacing with our majority shareholder, ISAM, as well as for internal communications within the group.
What is your main focus in terms of sales and marketing?
My main priority is to grow our client base, with new clients in new jurisdictions. A key focus is also to broaden our product offering amongst our existing clients. For example, many clients who use our liquidity could also benefit from our risk management services. These services can add real value to their businesses. I am also looking at opportunities to develop a more institutional client base. We have strong market share in the retail broker space. Moving forward, we plan to extend our focus to other non-retail businesses that trade FX such as banks, brokers and hedge funds.
IS Prime has had a meteoric rise since launching in 2015. Why do you think your market share has grown so fast?
From the outset, we have been very selective about which clients we choose to compete for but when we choose to compete, we are very rarely beaten. Our selective approach in terms of client acquisition has been combined with a focus on value add for clients. We have also been very careful to protect our LPs and to make sure that we sell our franchise at the right price. Another key reason for our ‘meteoric rise’ is because of the breadth of our offering. The combination of our FX and bullion liquidity, Index Swaps and risk services really does stand out in this market. In addition, no other PoP has such sophisticated technological and quant resources at their disposal and this has had a major impact on the quality of our offering.
Your role covers all client requirements from a technical perspective including customising client trading environments, flow and pricing optimisation and integrations. What is exceptional about IS Prime’s technology and how does it differ from your competitors?
Our core trading solution has been built from the ground up, influenced by our industry expertise coupled with the technology-driven DNA of our parent Hedge Fund. The result is a unique, highly sophisticated solution which is dynamic, scalable and highly customisable.
Most of our competitors use an out-of-the-box solution and/or lack the technical know-how to support high-end systems. This limits their ability to have end-to-end control – an aspect which is absolutely critical for both clients and Liquidity Providers. Liquidity Providers are often a forgotten piece of the puzzle yet they underpin the entire market place. Our ability to dynamically manage and route liquidity undeniably enhances our competitive edge – and this includes spreads, execution and value adds such as swap pricing. We have an extremely talented group of technologists at IS Prime, capable of sustaining and further developing our high calibre system, enabling us to remain ahead of the curve.
Your remit includes a specific focus on highly complex integrations and managing multiple technology partners and venues. Can you give an example of the kind of activity you get involved with?
IS Prime focuses on technology driven diversification as a mechanism for its growth and global expansion. Naturally, this presents a very real challenge in ensuring that as our clients’ needs evolve, IS Prime continues to provide high quality liquidity, technology, risk management solutions and importantly, unrivalled service delivery. In addition to focusing on our own technology, IS Prime plans to increase our presence within the Equinix LD4 and NY4 datacentres. This will benefit both our Prime of Prime and Agency clients. I am responsible for managing these multi-faceted projects, leveraging my technical skillset and industry experience. There are many moving parts to these projects as they involve the co-operation of our 16 existing technology providers. My role is to ensure the smooth delivery and rollout as well as to provide subsequent ongoing operational support.
How is the sales team structured and what is your role?
Our sales team is split between Business Origination (sales calls/seeking new opportunities) - which is headed up by Richard Maguire - and Business Development (closing new business deals / growing business from existing clients) – which is the area that I focus on, along with James Wale. The two sides of the sales team work closely together. Once Richard and his team have identified new opportunities, then myself or James are introduced to the potential client and focus on closing the deal.
James and I also look after key client relationships and look at the commerciality of our existing client business. It’s our role to ensure that clients are sold the most relevant products and services from across the ISAM Capital Markets group portfolio. We also need an in-depth knowledge of our clients’ businesses so that we can spot additional sales opportunities to support their growth ambitions as their businesses evolve.
IS Prime has a very broad service offering which includes aggregated traditional and non-traditional liquidity in FX, bullion, Index Swaps, commodities, cryptocurrencies, Prime of Prime capabilities, risk and bespoke auto-hedging services. Which products and services are most in demand?
It is difficult to say one product is in more demand than another because this depends on many factors including, but not limited to, the client’s business model, target audience, technology infrastructure, risk appetite and, of course, the underlying market. In a short space of time, IS Prime has become one of the leading Prime of Prime brokers in the world, largely due to our flagship product, FX and Precious Metal Liquidity, which offers highly competitive prices and exceptional execution times. With IS Risk Analytics as part of the ISAM Capital Markets group, we have bolstered our offering and can now help clients to maximise revenues from an existing book of business and increase their market share. We can assist A Book brokers, B Book brokers and hybrids of the two, and can also help those with a mixture of both retail and institutional flow. We support clients across all business models and pride ourselves in providing an unparalleled level of service.
You have successfully established and grown IS Prime’s Agency Execution business and built a strong client base of hedge funds, mid-tier and smaller banks and voice traders. How does IS Prime’s Agency Execution service stand out in the market?
We stand out in terms of price, technology, service and ‘can do’ approach; always delivering on what we say and going that extra mile for our clients. We are driven by our belief that we are the leaders in the industry and, as a result of this, we always focus on delivering the very best service.
It is a real advantage that I spent 20 years as a trader in a number of prestigious banks prior to joining IS Prime and setting up our Agency Execution business. This means I know exactly what our institutional clients require in terms of Agency Execution from both a product and service perspective. In terms of our offering, we provide broad based connectivity to all areas of a fragmented market and can source liquidity in different currency pairs and amounts that the client requires. We provide a genuine customised service to our global client base and are always responsive to client needs, on a 24 hour basis. We have extremely high client retention rates and this is a real testament to the success of our service.
Where are most of your clients based in the region and where do you see the growth opportunities?
The group has historically had a strong presence in Asia Pacific, specifically in Australia, so we are looking to build on that. In terms of the growth opportunities that we see in the region, we predominantly find them in North Asia. Having said that, what we have discovered is that prospective clients tend to be organised into two groups with regards to their set up: the more established brokers who tend to migrate to the more robust regulatory jurisdictions and the start-ups who tend to choose more flexible jurisdictions where the regulatory and capital requirements are less onerous. That means we are, in fact, in dialogue with brokers spread across all parts of Asia Pacific.
What are the key trends in the region and how are you positioned to respond to these?
As Asia Pacific is a large region, varying economically, socially and politically, we find some glaring differences among the brokers we encounter. These include market understanding, trading style/sophistication and education with regards to risk management. With that in mind, one of the key trends we are starting to see is the movement away from pure B Book models to more hybrid A & B Book strategies. This has been largely driven by the brokers’ own retail clients who, as they become more educated about the forex market, want to trade with more reputable and sophisticated brokers. The follow on from that is many brokers are looking to move to better regulated jurisdictions (e.g. FCA, CySEC, ASIC) and to manage their risk better. Elsewhere, from a platform perspective, since the suspension of MT4 support coverage by Metaquotes in December 2017, we are seeing a number of brokers looking to purchase MT5 licences.
IS Risk Analytics has a technology service, an outsourced risk service and a risk advisory service. How is the team structured?
The ISRA team has a very deep history of managing risk and developing technology for the OTC markets. We have a highly specialist, expert team which comprises of risk and operational coverage, quantitative analysts, software architects, infrastructure specialists and business development. Our risk and operational coverage team is responsible for direct communication with our global clients, and we make a conscious effort to ensure that our clients feel our presence 24 hours a day.
Risk management and technology are at the centre of a broker’s business, and our coverage team’s focus is to support our clients and communicate their needs within our firm, whether it be on a technology, risk or any other front. Once our clients’ needs have been communicated internally, the technology and quant teams tailor solutions to meet their needs.
When it comes to managing risk and maximising revenue, do you tend to encounter similar situations from all the brokers you work with or is every broker different?
Every broker is different which is why we have customised strategies for every client, whether they are large or small. However, it is quite common for brokers to share similar problems. The single largest advantage we have at ISRA is our vantage point in the industry. We can see trends and activity causing issues in one region, and we know how those trends normally spread. A recent example is malicious signal based USDNOK flow. At ISRA, we saw this develop in one region of the world, then spread throughout Europe and down to Australia. We could detect and mitigate this on day one/trade one because we could anticipate this coming due to our cross-industry visibility. This vantage point doesn’t happen overnight. It has been built over many years of experience and relationship building. Brokers who utilise ISRA’s services are always several steps ahead of their competition when it comes to risk management.
What are the advantages to your clients of being part of the ISAM Capital Markets group?
ISAM Capital Markets is the ecosystem that allows brokers to know that the most important part of their business is being handled properly. There is no point in sales and marketing efforts if a broker cannot consistently monetise trade flows. Within the ISAM Capital Markets group we have industry-leading liquidity solutions, bridging, risk services and much more. Everything we do is systematic and we enable a broker to focus on growing its business. It is far too common these days to find a broker’s CEO knee deep in risk conversations because that is so often the pain point. We have case study after case study where a broker solves this by engaging with our group. Their trade flows become properly monetised and the brokerage goes into growth mode.