Long before fintech became a buzzword, Michael Spencer was charting a course in that direction for the interdealer brokerage, now known as ICAP, that he founded in 1986. Following acquisitions in the early 2000s of e-trading platforms BrokerTec Global and EBS, which were combined last year into EBS BrokerTec, and a ramp-up in posttrade services and R&D investments, London-based ICAP has been redefining itself as a fintech firm and the worlds leading multiproduct global electronic network for over-the-counter products and posttrade services, says Spencer, 61. To cap it off, ICAP is awaiting regulatory approvals to transfer its voice and hybrid brokering businesses to Tullett Prebon, and plans to rebrand itself as NEX Group. Our whole focus as a management team will be on these higher-growth, technology-focused businesses, says the CEO, noting that 79 percent of £1.2 billion ($1.7 billion)-in-revenue ICAPs operating profit comes from what will be NEX activities. Spencer has his executive team lined up, including CEOs Jenny Knott of Post Trade Risk and Information (PTRI), Gil Mandelzis of EBS BrokerTec, Per Sjöberg of derivatives risk mitigation platform TriOptima and Steve Gibson of venture investment arm Euclid Opportunities. The Euclid portfolio included hedge fund and prime brokerage data platform ENSO Financial Analytics until April, when ICAP bought it outright for the PTRI division. Also this year, Euclid purchased a stake in Digital Asset Holdings (see Blythe Masters, No. 17). We are not trying to disrupt but are working with the industry, Spencer says of ICAPs practical approach to blockchain strategy. PTRI completed a proof-of-technology test of distributed ledger in February, so we are well under way in understanding and experimenting with this technology. Spencer believes there are countless opportunities to improve financial market efficiency through data and capital management, as TriOptima is demonstrating with its portfolio compression service and OpenGamma, a Euclid portfolio company, is doing with central counterparty margin optimization tools. In June, EBS BrokerTec announced a three-year, $65 million deal to provide next-generation technology for China Foreign Exchange Trade Systems fixed-income and currency execution services. Spencer describes the project as a significant platform which will play a key role in the future of the renminbi.
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