Ram Vittal, CEO of Marex North America, was on a panel at FIA Expo 2022 about recent geopolitical events and their effect on the markets. John Lothian News spoke with him following the panel, and he talked about market disruptions, the threat of nuclear war, and Marex’s October acquisition of ED&F Man Capital Markets Limited’s UK business.
The consensus of the panel was that markets performed quite efficiently, Vittal said, despite major disruptions like the Russian invasion of Ukraine and its effect on energy, grains and metals. He said there was greater disruption in Europe than in the U.S.
“Given the context of how unprecedented this is, the markets did well,” he said.
He also talked about markets sometimes not having adequate liquidity, and whether there should be a mechanism to have a more favorable treatment for market makers and hedgers.
He said that when he joined Marex in 2020, the company’s segregated funds were at about $1.5 billion, and in the two years since then seg funds have more than tripled to about $5 billion.
“One of our defining propositions is that we are interested in technology and have some of the most advanced technology in the industry,” Vittal said. “But most importantly, we pride ourselves on client service. This is a client service business.”
Marex closed its acquisition of ED&F in the UK in October 2022, and it has received all the regulatory approvals in the U.S. Vittal said that together Marex and ED&F would have about $9 billion in segregated funds, which would make them one of the largest independent FCMs in North America, if not the largest.
But, he said, quantity and size is not as important as the quality of Marex’s growth over the past two years.
He said the acquisition is exciting because the two companies are very complementary in their offerings. Marex has a very strong presence in agriculture, and ED&F has a very strong presence in financial clients, he said. “And ED&F has some capabilities on the brokerage side,” he added.
“I think ED&F was very capital constrained in the last couple of years. Marex has a really good capital structure. So marry that with the capabilities of ED&F and some of our own governance and entrepreneurial culture and I feel extremely optimistic about the next two to five years,” Vittal said.