Q How does your counsel vary between emerging and more experienced managers?
A Initially, it’s important for us to discover in detail what they're trying to achieve and how they wish to operate, so we can design and deliver the services to best suit their needs. To do this, we assess clients' investment strategies, how often they would like to trade, how and where they intend to allocate their capital and which technology solutions can help to fulfil their intentions. We will also discuss how we can work within individual clients’ operational and reporting requirements. Our platform is customisable and flexible hence it is relatively easy to service different client types from the same core solution.
In early-stage managers, people often have to wear more than one hat. Our role is to make their life as easy as possible by delivering information in the way that they need, while also assisting them with their trading requirements. We can be as high touch as they need us to be, across all aspects, without charging punitive fees. We treat all clients, large and small, fairly and comprehensively.
We enjoy the type of relationship where we can perform a deep dive into the client’s business and get to know how they operate in detailed fashion. We can then be sure we are well-positioned to deliver the services that are going to help them establish themselves and hopefully flourish.
Given that our architecture is very flexible, we can provide clients with a one-stop solution, which covers reporting, technology and execution. If the client is more developed, they'll have more external parties which we're also able to plug into as necessary. Much of our infrastructure and architecture was built some years after many of the more traditional prime brokers, so it's often more cost-effective for us to onboard and service a client compared to legacy technologies.
Q How else do you support emerging managers?
A Based on the proliferation of primes over the last few years, it's obvious there is space for the smaller prime brokers to support new managers. However, it's becoming more and more evident that those prime of primes themselves need to have some substance behind them in terms of a balance sheet and the technology they're providing. As one of Southeast Asia's largest banking groups, we bring a very strong financial standing, which benefits our clients.
Naturally, we wish to grow with our clients, and this requires flexibility on our part. We present fairly low barriers of entry in terms of the cost to the client. We'll look at revenues at the end of the year, but we won't just turn people off if the fund isn’t meeting targets. Instead we'll find alternative solutions for them, so that the relationship works positively for both of us. As the clients grow, they may wish to add in additional relationships, so we want to make sure we remain part of their ecosystem.
We are proactive in keeping a regular dialogue open with our clients, to inform them of other services, developments and enhancements we're making to our platform. We also make sure to inform clients about what is available within the wider group outside of the prime product that might also be of interest to them; such as the large network of our own institutional equities and fixed income specialists within the group. We can add a lot of value to clients if they have interest in these areas. It’s an advantage we have over other prime of primes and mini primes who are solely resellers. We therefore offer access to a much wider potential inventory and trading lines that some of our peers simply don't have.
Q How do you ensure a joined-up, consistent approach among the regions you operate in?
A The head of prime brokerage and institutional equities is the same person - Jeffrey Goh. It's an advantage having a boss who controls two main pillars of the business. He helps join the dots very easily, so the two businesses, and other parts of the group, work closely together.
Q What role does technology generally play and how would you say that tech in the prime space has evolved since you entered it?
A We have a very advanced trading platform and front office solution which is real-time risk managed. This continues to develop, but our focus recently has centred on delivering in the middle and back office layers because of regulatory changes and administrator requirements. The amount of data we need to provide, and process, is constantly increasing, so it's important to focus resources on that part of the business to make a client’s life with us as easy as possible, so they can concentrate on what they do best.
A further advantage of developing and managing our own technology solutions in-house, is that we're able to continually develop these products very quickly and ensure that they are integrated with all of our existing reporting for clients, because we always want to present to the client a unified solution whenever they're dealing with us.
Q What plans do you have for 2020?
A This month we are going live with a new venture: a clearing business to sit within our prime brokerage offering. We are hosting this business independently from our own prime brokers. Clearing is a business other prime brokers have offered to their clients, but we’re able to provide the service in our own name, offering Model B as well as A arrangements. Historically we have been a business which has had a strong bias towards equities but we're really expanding our fixed-income expertise and capabilities with the launch of this clearing product.
Also, this month, we will be going live with another new product - synthetic bond CFDs. This is a very interesting product for clients because it increases the universe of fixed income products where we can offer leverage. The product will also provide higher leverage on average than we could on a cash product. For some clients who prefer to trade in synthetic products, it gives them access to an asset class which a lot of prime brokers don't offer.
Len White joined Maybank in 2014 and is head of European prime brokerage where he is responsible for activities within Europe, the Middle East and Africa. He has worked within financial services in London for nearly 30 years covering institutional equities sales and trading, portfolio trading and leveraged products. He has managed teams and businesses at Daiwa Securities, Man Group and Cantor Fitzgerald – he was part of a team that was instrumental in the growth of CFDs in the UK while at GNI (latterly Man Group) and has worked in the prime segment for nearly two decades.