Gerry Corcoran has seen plenty of ups and downs in almost 30 years at RJ O’Brien & Associates. The key is to be a bit of a contrarian – which means building when others are tearing business units down.
The firm, which holds $3.7 billion in segregated customer funds and is among the largest non-bank FCMs in the industry, has held its own in recent years. Low to negative interest rates globally haven’t helped, but the firm has steadily embarked on expanding geographically as well as adding new business lines for the firm.
“We’ve circled the wagons around our core assets and strengthened them,” said Corcoran, chairman and CEO of RJO. “We’ve been able to take advantage of the disruptions in the marketplace and other FCMs who weren’t so fortunate in terms of building up a scalable foundation and kind of drifted. The banks have been crushed too, with the leverage ratios they have.”
Instead of riding out the crush of low to negative interest rates and increased regulatory burdens, RJO has been aggressive in building its business. Just over a year ago, RJO purchased the London-based The Kyte Group, one of the largest clearing firms in Europe. That has strengthened RJO’s UK and European operation. Meanwhile, RJO has continued to grow its Asian operations as well as expand in the FX space.
“We’ve been preparing ourselves for the storm. How do we take advantage of it when others can’t?” Corcoran said, attributing those strategic moves to the O’Brien family ownership support. “Since interest rates have gone to zero, we’ve expanded in Asia, expanded in Europe and expanded in FX, and our Canadian operation is thriving.”
The firm also added connectivity for customers to another nine exchanges since interest rates fell to zero. And as capital ratio level requirements have tightened on banks in the US and Europe, RJO has also branched out to lure some of that business its way. Six years ago, RJO decided to open an institutional brokerage unit in Chicago, renting out an entire floor in its headquarters. Now with that space filled, RJO is expanding that business further.”
“As banks have trimmed the ranks, we are getting a lot of good looks at these brokers,” Corcoran said. “I think we’re bringing stability to that space, and brokers know we are not likely going to have another disruption going forward. A lot of brokers have gone from one institution to another, only to find out that institution has decided to change strategies on them. We’ve got a global brand name and tremendous stability.”