Could you tell us about your background and how you got into the financial services industry?
I studied economics at university in the 1990s, but it wasn’t until I did my masters in business finance that I realised I wanted to take a finance path. After applying furiously – I must have sent off hundreds of applications in the City – finally I managed to get a job with KAS Bank.
That was my first ever job in the City and I think the best thing that happened to me as a young person, because it was a small bank so you could do lots of different things and learn on the job across the entire securities chain.
My focus very early on was always on the client side, in client-facing roles, account management, relationship management, and that was a good rounding off for me really understanding the industry.
Then in the early 2000s I moved to Pershing, working for Pershing New Jersey, which gave me a slightly different angle with more of a focus on the clearing side. I spent a bit of time in the US – New York and Chicago – really understanding the correspondent clearing business. We were building the business up quite nicely.
From there you went on to a 10-year spell working at two of the largest investment banks in the world, what did you do at JP Morgan and Citi during this critical time for the financial markets?
In 2004 I moved to join JP Morgan in the old institutional and transaction services business to work on the clearing as well as the triparty collateral management business.
I’d probably say it was in its infancy then. I remember us breaching $200 billion in assets that we managed in our triparty collateral programme and that number is probably $4-5 trillion now.
It was a great institution to work for, JP Morgan. One of our biggest franchises within that GlobeClear business was actually Russia. We used to clear for almost across the entire market for the top 10 Russian broker dealers as well as all the US broker dealers. Smaller, mid-sized US broker dealers doing international business.
That was a really good spell and what was interesting about JP Morgan in those days was that there were so many acquisitions, so the bank was just getting bigger and stronger.
I remember the acquisition of Bank One and even though the JP Morgan ‘brand’ won out in the end, it was almost like a reverse takeover because all of the Bank One hierarchy really took over the reins at JP Morgan, obviously including Jamie Dimon and Mike Cavanagh.
It became a completely different bank in the sense that the ambition was that they were going to be number one or two in almost every business line, otherwise there was just no point being in some of those periphery businesses.
Then in 2008, I moved to Citibank to head up the direct custody and clearing sales EMEA, across the 32 markets. Again, a very interesting time because this was just pre-Lehman and it was a tough, tough two or three years there.
We were unwinding obviously 11 or 12 markets that we were the primary clearer for post-Lehman, and becoming effectively, the bank of choice for the sub-custody business, including for one particular market where at one point during the crisis, I think we held more Icelandic kronas than the National Bank of Iceland.
Following that, I moved back to JP Morgan with a few people from Citibank to build out the sub-custody business and really that was slightly different to the Citi franchise because the key driver there was to build out sufficient scale to be able to internalise all of JP Morgan businesses in the key markets like Brazil, Russia, Hong Kong and India as a starting point.
Looking through your CV, there’s almost a third chapter of your career post-JP Morgan and Citi, where you’ve had quite an intriguing range of roles.
That’s right, I then left the industry for a couple of years to do a couple of things on my own. I started a renewable energy company, a hydro renewable energy company with a couple of friends and I still have a small stake in that. We are effectively building mini hydros across Central Eastern Europe. That gave me a slightly different perspective away from finance.
Then in 2016 I joined Soc Gen on the securities services side to run its global
broker dealer sales and RM team within SGSS. That was a nice period and then the final chapter – in 2019 – I joined LCH to run the EquityClear business which was a nice career progression move for me in the sense it was effectively running the P&L and owning all aspects of the business.
Financial market infrastructures were becoming ever more critical, obviously on the back of the 2008 crisis, but the regulators were also effectively putting more focus on institutions using financial market infrastructure to focus on improving the resilience of those providers, in terms of risk. Making sure that that risk was insulated as much as it could have been by setting standards like taking in a lot of resources from those members and making sure that those members were sustainable by having a default fund.
Those two or three very turbulent years in the equities world was driven by lots of geopolitical uncertainty and US elections with Trump coming in. Then there was obviously a huge, huge challenge on our hands from a Brexit perspective and the push to move Euro denominated business out of the UK CCPs into continental Europe.
But we had record years in 2019, 2020 and 2021 – with huge volumes almost topping 1.9 billion trades cleared in 2021.
In the midst of that, LCH was deploying the new EquityClear platform in March 2020 which was a huge significant investment and a ground-up platform which really gave us the ability to process quicker, to run our risk book in a much shorter time frame and give huge headroom in terms of processing capacity as the business grew.
So we were well prepared to take on a lot more volume and a lot more volatility in the system which is obviously still ongoing now even with the Russian situation.
What have been the main differences between those institutions?
Culturally, the US banks are probably the most vibrant, the most aggressive, and there’s huge drive for performance across the board.
I’d probably say that Soc Gen was a bit of a culture shock in the sense that it was a lot more laid back. It was a lot slower moving than what I was used to in the Citi and JP Morgan’s of this world.
And then on the infrastructure side, it really evolved culturally massively over the three years that I was there – and that process probably started a few years before – because they became a lot more centralised and they became operating and profit making businesses rather than market utilities.
That change meant they had to be a lot more efficient. The equity space is the most competitive asset class out there from a from a post-trade and clearing perspective. With margin being squeezed, you have to run those businesses in an efficient manner by reducing your costs by making sure you can charge for services that we’re adding value to for clients.
Even though there are 19 CCPs across Europe, there are only probably three or four that really kind of dominate the space.
People and relationships seem to be a big part of what you do, how has that helped you in in your career and has that been a foundation in your approach to work?
I think people have been a massive help across my career and I’ve learnt from some exceptional people across all of those institutions, especially in the early years. Having good mentoring and working with experienced people that you can learn from and bounce ideas off was hugely helpful to my career.
It also helps to have strong networks within the entire industry, not just your client base, but your competitor space too. It is a relatively small world and it helps if you know the people that allow you to navigate those organisations. They may not be the right kind of person for a particular situation, but if you know the people within those organisations they can definitely help you and they become your biggest advocates
Especially the big organisations, because sometimes there are lots of gatekeepers. But having a strong network really kind of helps open up those institutions to do business with them.
What excites you about the industry in the future and what concerns you?
The excitement comes from taking on new challenges. The first move – switching from Pershing to JP Morgan – going from a relatively small institution to go into a top tier bank was hugely challenging. Then from JP Morgan to Citibank to run the sub custody sales across EMEA, a huge book of business probably in the most contesting times – I love opportunities where you’ve got scope to grow and build. Obviously at LCH we’ve done a huge amount of work, effectively doubling the revenue over the last three years and making the business profitable.
The next challenge really is going to be again, something with a lot of upside in terms of growth. I think I’m well positioned for another infrastructure role. I love the infrastructure space simply because they’ve become a lot more core to the entire ecosystem, and building network businesses is great because if you’re successful, it’s very difficult to dislodge network businesses.
What’s made a good day in your career?
Launching the CCP platform was probably the most scary and challenging time, just pressing that go button when you’re clearing across 16 different markets and launching the platform in the hottest ever kind of market environment.
What we did – over a month’s volume in five days – including three or four consecutive record days. I will never forget that day (12 March 2020) – where we did over 18 million trades in a single day when our average was five or six million the year before.
It was quite a testing time and just making sure that the platform was processing, churning everything out and we didn’t have any kind of huge outstanding risk positions and all our margins were collected. That was a good day!