Marex Spectron builds global FX team; replicating broker-dealer model
Marex Spectron, the fixed-income and commodities broker controlled by a group of former Lehman Brothers executives, has commenced the global build out of its FX business, with a series of key hires in London, Singapore and Geneva.
The firm plans to make further hires in New York this year, Chris Eagle, its global head of FX, told EuromoneyFXNews. According to Eagle, Marex is keen to change some common perceptions of his firm – as an agency-broking model – into a firm that resembles the traditional broker-dealer model, not unlike that of a Lehman Brothers of the 1990s.
“In so far as the perception of this firm has been as a foreign exchange agency broker, going forward that’s very much a perception we want to change,” he said in an interview from Marex’s New York offices last week. “If we go back to the way foreign exchange at broker dealers used to look like in the 90s, that’s very much how we see our business model.”
To that end, Marex will be prime brokered with Citi, although it does have access to more than one PB, so clients will be able to trade against the Marex name.
The firm will target middle-tier financial institutions, such as smaller hedge fund managers and smaller asset managers, especially those firms where FX might not be their main asset-class activity, and, as such, might not see the same level of service from bank FX desks.
“We see an opportunity to add value to all manner of financial institutions, including investors of different kinds; counterparties who require in some cases both idea generation and great execution,” Eagle says.
The firm has hired Simon Durno, who worked with Eagle at Morgan Stanley and began his career as a currency arbitrage trader, and Kelvin Jouhar, another veteran, most recently with Lloyds Bank, and one of the founders of the Tullett Prebon currency options desk.
It has also hired Hetal Patel, also most recently of Lloyds Bank, where he had more than 20 years’ experience in emerging local markets.
In addition, Marex has hired Willie Sim, to head up its FX operations in Asia-Pacific, based in Singapore, and Anna Dahan in Geneva, from Royal Bank of Scotland, where she covered local banks, investors and family offices.
Sim, previously at Merrill Lynch in Singapore, had run Asian FX at Refco in Singapore, before it was acquired by Marex in 2006 after the firm collapsed.
Eagle, who joined in January, was most recently head of options trading at CIBC in London, argues that the less-liquid currencies and products might be a big opportunity for a firm such as Marex to provide clients with differentiated service.
“There are lots of clients out there for whom you can source liquidity in lots of commoditized markets, but there’s certainly an opportunity in getting price discovery in products that are less liquid and where the actual aggregation of liquidity is becoming much more disparate,” he says.
“Currency options and emerging markets in particular are markets where there is an opportunity for us to add value to the middle tier.”
The new hires will add to the current FX head count of 15, all of which are presently based in London. Eagle expects to make more hires throughout 2012, and says that, given the type of business he is building, he is seeking experienced talent with both a trading and sales background.
“We’re looking for people who are used to working in that global environment, and who are used to working in a team located in different centres,” he says. “The types of people with a lot of experience, and who know and understand risk.”
For Marex Spectron as a firm, it has come a long way since January 2006, when Marex Financial, then backed by New York-based Marathon Asset Management, bought the European operations of Refco, which collapsed in late 2005 after its chief executive, Phillip Bennett, hid $430 million in bad debts. He was later sentenced to 16 years in prison.
In December 2009, Jeremy Isaacs, the former European head of Lehman Brothers, took a 75% stake in Marex via his private equity firm JRJ, which he had set up with Roger Nagioff, the former global head of fixed income at Lehman. In March last year, Marex paid £94.5 million to buy Spectron Group, a leading broker on the over-the-counter energy derivatives market.
Other smaller shareholders in Marex include private equity groups Trilantic Capital Partners and BXR Group, while Issacs has brought in the former Man Group chief executive, Stanley Fink, a member of the Marex board.