LeapRate interview…Raj Sitlani and Jonathan Brewer set up IS Prime in 2014 with systematic hedge fund manager, ISAM. Their plan was to lead the market with a technology driven approach, gain a competitive edge through proactive client relationships, and focus on building strong relationships with Liquidity Providers.
As they celebrate five years since their first trade, Raj Sitlani, Managing Director of ISAM Capital Markets, explains about the key milestones leading to their business success.
LR: When you were setting up the business, what were you key priorities in terms of defining your offering?
Raj Sitlani, Managing Director of ISAM Capital Markets
Raj: Firstly, Jonathan Brewer and I had worked in electronic trading together for over ten years and had a thorough overview of the competitive landscape as well as an in-depth understanding of institutional clients’ liquidity and technology requirements. We knew what worked well and what we wanted to do differently. We believed we could create a better offering than already existed in the market and found an ideal partner in ISAM, a $3.2BN FCA regulated systematic hedge fund manager with exceptional technology and market relationships. This partnership meant that our capabilities would set us apart from the Prime of Prime offerings that already existed.
Secondly, we wanted to build a best in breed team and, as we grew the business, we carefully cherry picked people from banks, brokers and technology providers to join our sales, trading and technology teams.
LR: How important is your proprietary technology to your offering today?
Raj: It has been key from the outset and remains one of the areas that differentiates us today. Having sophisticated proprietary technology and execution tools enables us to optimise liquidity for clients, resulting in consistent pricing and tight spreads.
When we launched the business, we used Broadway with some added value proprietary elements but over the last five years, having invested over $10 million in our own technology, we have built a unique, state-of-the-art and robust solution utilising ISAM’s quants expertise. We launched Hubble in 2018 to deliver an even greater level of customisation and flexibility to institutional clients, with bespoke liquidity pools and execution rules, and we launched our proprietary FIX hub and matching engine in 2019. We continue to evolve and invest in our technology as this is the cornerstone of our business.
Last year we also released our new failover technology to provide clients with a solution that is as close to bullet proof as possible, with 100% up-time across data centres and no single point of failure.
LR: Your growth has been meteoric. What were the key milestones?
Raj: For the first two years we focused heavily on client acquisition and, based on the strength of our offering, quickly attracted many of the largest brokers in the world including from ASIC, CYSEC and FCA regulated entities.
After trading for two years, we were able to pay back the $5m loan for the initial seed capital to our majority shareholder and we cleared all outstanding debt. This, alongside a 900% increase in operating profit in the first two years, was a significant achievement in such a short space of time and cemented our position as the fastest growing Prime of Prime globally. By July 2016, within just one and a half years since our first trade, the first trillion dollars of flow was executed.
Another major milestone was the acquisition of the assets of Think Liquidity, the leading provider of risk management focused technology and services in January 2017 and appointing its Managing Director, Jeff Wilkins to head up our newly created firm, IS Risk Analytics (ISRA). The opening of our office in Hong Kong in February 2017, headed up by Will Robbins, was also a major step, allowing us to offer technology and technical support in the APAC region. These milestones resulted in the formation of the ISAM Capital Markets Group to provide a framework for further growth and diversification. Having ISRA and IS Prime Hong Kong within our group has provided significant added benefits to IS Prime’s clients.
In December 2019, following an extensive and rigorous process, IS Prime Hong Kong was granted a Type 3 Leveraged Foreign Exchange Trading licence by the SFC in Hong Kong, enabling us to offer Leveraged FX Trading services to institutional professional investors. This has been a catalyst for further growth in the region.
In addition, over the last year we have focused heavily on integrations with leading technology providers, broadening access to our liquidity by making it available to a wider network of brokers and banks worldwide.
LR: How has your offering evolved since IS Prime’s inception?
Raj: We launched with FX and Bullion and then, in 2017, extended the group’s offering to include Index Swaps. We continuously look at evolving client requirements and develop appropriate products accordingly. For example, we developed an innovative batch hedging tool in 2017 to facilitate copy trading, enabling brokers to provide the same fill price to all traders involved in social trading – addressing an ongoing issue for brokers.
In response to the negative oil price in April this year, which resulted in major losses for many brokers, the group launched a UK and US oil index, rebased at $100. We were the first Tier 1 Prime of Prime to provide a solution to combat the risk associated with the spot oil price going negative again. This is a great example of utilising our in-house resources to develop a robust product within a very short timeframe.
LR: What are you most proud of?
Raj: We have delivered exactly what we set out to achieve – and more. I am particularly proud of the fact that we have a very high client retention rate – in fact, we still have our first client – and we have a very low staff turnover. This is a real testament to the success of the business.
I am also proud of the close Tier 1 Liquidity Provider relationships that the group has worked very hard to build over the last five years. It is because of these relationships that we have such a compelling liquidity offering for clients.
We have received a number of strong external endorsements of our achievements over the last year, including being named by the Financial Times as the 15th fastest growing financial services company in Europe and winning prestigious ‘Best Prime of Prime’ awards from FX Week and Profit & Loss. Getting this level of external recognition truly validates our offering.
LR: What are your future plans?
Raj: We plan to build on our success, continuing to grow our client base in new territories. We also have plans to develop more proprietary technology and enter new segments of the market. We will be making further announcements in the Autumn as we continue to expand.
