LeapRate Exclusive Interview… We often begin interviews with leading FX industry figures with a lengthy “setting the stage” intro.
But not here.
Following this weekend’s news of the Chapter 11 reorganization filing by Global Brokerage Inc (NASDAQ:GLBR), we’re just as curious as our readers to hear directly the people leading FXCM Group, in which GLBR owns a 50% stake, FXCM CEO Brendan Callan (pictured above) and Chairman Jimmy Hallac, who is also Managing Director at Leucadia.
So here’s what they have to say, only at LeapRate.
LR: Hi Brendan. There seems to be a lot of misinformation circulating out there about FXCM after Global Brokerage announced that it had reached an agreement with Leucadia and the Global Brokerage convertible noteholders to file a pre-packaged restructuring under Chapter 11. Do clients realize that the GLBR restructure has nothing to do with FXCM itself? Have your trading volumes or deposit/withdrawal levels been affected at all early this week?
Brendan: You are correct – Global Brokerage’s restructuring has nothing to do with FXCM. In fact, all the parties involved went out of their way to let all stakeholders, not just clients, know that it is business as usual at FXCM.
As you know, FXCM and Leucadia have been explaining to our clients that FXCM’s day-to-day businesses have basically nothing to do with Global Brokerage. FXCM remains well capitalized, sufficiently liquid, and is definitely NOT part of the Global Brokerage restructuring.
As to volumes and deposit levels; with over 120,000 active accounts and around $200 billion in monthly trading volumes, FXCM remains one of the largest brokers in the industry. Our clients have stood by us and continue to appreciate our pricing and industry-leading customer support.
LR: How has the backing of Leucadia benefited FXCM, since Leucadia Managing Director Jimmy Hallac became Chairman of FXCM earlier this year?
Brendan: Leucadia has been incredibly supportive of FXCM since it first got involved in January 2015. Leucadia’s engagement increased further in September 2016 when Jimmy along with Rich Handler, Leucadia’s CEO, and Brian Friedman, Leucadia’s President, joined FXCM’s board of directors.
Leucadia is a big firm with a $9 billion market cap and numerous operating businesses, including Jefferies, so having direct and regular access to three top executives is extremely valuable to our team.
Since becoming Chairman earlier this year, Jimmy has worked hand in hand with me and the management team at FXCM, providing support and assistance in every way possible. We benefit greatly from being a part of the Leucadia group of companies and equally, our clients have, and will benefit from the many doors now open to us. Leucadia’s actions, behavior and public statements show that they believe in FXCM’s future success and are in this for the long haul.
LR: Jimmy – How does Leucadia view its investment in FXCM? You’ve gotten back most if not all of your original $300 million loan back from them over the past (nearly) three years. Is this just a financial engineering investment for Leucadia, or do you see this as an opportunity to back FXCM over the long term?
Jimmy Hallac
Jimmy: As Brendan just said, Leucadia fully supports FXCM and we believe in and are committed to FXCM’s future.
As to our recovery on the original $300 million investment, we have always been more focused on the potential value of our ongoing majority economic interest in FXCM. We knew before we became involved that FXCM had a great business but it got caught up in an unfortunate turn of events with the Swiss National Bank incident in January 2015. We knew that, with patience and steadfast support, FXCM would continue being a global leader in FX and CFDs. FXCM has a loyal customer base, excellent products and services and a team focused on innovation and improvement – all essential qualities for an enduring business.
Leucadia is a long-term investor in operating businesses, not a trading shop, and our investment FXCM is no different.
LR: Brendan – With the Global Brokerage restructuring “noise” behind you now, what do you see as your major challenges in the coming months running and growing FXCM. From where we stand, the Retail FX sector is getting increasingly competitive, especially in high net worth markets such as the UK, where you are based. Where are FXCM’s main opportunities?
Brendan: FXCM has been around a long time. You’re right in saying this is a very competitive sector and continues to get more so. We have survived and thrived all these years by focusing on what our clients have told us is most important to them; tight and consistent pricing, a user friendly platform and a responsive and competent customer support team. Those remain our focus as a firm.
With the recent “noise” behind us, getting the word out about the FXCM advantages will be less challenging and less of a distraction for our clients.
As far as our main opportunities; without giving too much away, I can tell you that we are in the process of launching a new WebTrader platform and a Rest API. We’ll be looking to offer a great deal of tools and support services for the algo trading community.