Following the announcement of their plans to acquire GMO Financial Holdings owned GMO-Z.com Trade UK Limited, the Invast Global team were in London to attend the 10th anniversary of the Finance Magnates London Summit.
Finance Magnates sat down with Chief Executive Officer Gavin White and Chief Commercial Officer James Alexander to discuss the trip, their respective panels and what retail brokers are currently after from a Prime of Prime.
What were your thoughts on the 10th Anniversary of the Finance Magnates London Summit?
Gavin White – After several years of travel restrictions, it was clear that everyone was very keen to attend the 10th year anniversary of the London Summit, proving that it remains an important touch point for many in the broking industry.
The summit facilitates information exchange and provides a setting for the development of relationships that endure into the future. It was great to see the place so vibrant and full of faces that I hadn’t seen over the last few years.
It was great timing for you all to be in London given the recent announcement of your plans to acquire UK based GMO-Z.com Trade UK. Was that planned?
Gavin White – It certainly was. This conference gave us the perfect opportunity for us to connect with the local team, many of whom have origins in Japan. They have a fantastic knowledge of the institutional market in both London and Japan, meaning their skillsets and contact base align perfectly with our strategic plans in both regions.
Like the Invast Global teams in Sydney, Cyprus and Japan, the team that we have acquired are just as single minded about delivering world class solutions to their clients. Having an office here in London will open us up to a broader audience, both in terms of clients and potential staff, where we have big ambitions.
James Alexander – London is, and always has been, a financial services hub with a lot of innovation and incredible talent. We are excited to open an office there for those reasons alone but also to be closer to our valued clients.
Both of you participated on panels during the summit. What were the key takeaways from the discussions in your opinion?
Gavin White – The liquidity panel was interesting. Every panellist had their differing views and opinions which led to an interesting and insightful debate. One of the most important trends we are seeing heading into 2023 is the continued pressure on our broker clients in Japan to maintain artificially tight spreads, resulting in somewhat of a ‘spread war’.
In response, brokers are looking for different instruments that are less reliant on spreads such as Indices, Equities, and structured products, such as Pairs, to generate alternative revenue streams. We could see a similar trend happen across the rest of Asia and Europe in the near future.
At the same time, we are seeing Tier 1 prime brokers increasing reluctance to provide OTC liquidity and some exiting the space entirely. This could be seen as a potential risk to some smaller Prime of Prime brokers but provides a strong opportunity for Invast Global to continue to grow.
James Alexander – Market Data is a segment that sometimes gets overlooked in favour of ‘more interesting’ topics such as liquidity and execution, which are crucial but not the only conversations the industry should be having.
A key point of the panel discussion was around the monetisation of market data. In our view, that involves creating a market data solution that delivers value to our broker clients, ensures full exchange compliance, and also allows for scale within our own data business.
At Invast Global, we see the facilitation of a genuine multi-asset trading solution based on a robust market data offering as crucial in our ability to attract, cross-sell and retain broker clients. The all too often overlooked component of market data is the speed and efficiency of delivery via fast and resilient trading infrastructure and networking.
This is crucial to our broker clients and ourselves as it also impacts our hedging efficiency.
From conversations you had with brokers and others in the industry, what is currently most important to them? What are they after from a Prime of Prime?
Gavin White – It’s clear that a growing consideration for retail brokers when choosing a Prime of Prime to deal with, is their ability to offer a genuine multi-asset solution. Prime of Primes that can offer a wide range of products on top of FX allow brokers to differentiate themselves from competitors and generate alternative revenue streams.
With the withdrawal and scale back of some Tier 1 PBs from the prime brokerage industry, access to credit has also become a larger talking point. As credit becomes harder to come by, those larger Prime of Primes with larger balance sheets and access to Tier 1 PBs will benefit and become more attractive to retail brokers.
James Alexander – Slowly but surely, brokers are becoming more interested in market data discussions and realising the value that a robust market data solution can provide. Prime of Primes that can offer fast market data delivery in a cost-efficient way, encompassing an entire suite of products is becoming increasingly desirable.
