DeepWell CEO: We Will Expand into New Asset Classes

Last week DeepWell announced it had hired seven new employees to spread its global reach. With former Morgan Stanley, Credit Suisse and Deutsche Bank employees in the mix, the agency broker to the buy-side now looks set to take the buy-side world by storm.

To get an idea of what the firm has been up to, Finance Magnates spoke to the firm’s CEO, Richard Leighton. Having spent time heading FX, commodities and options divisions at JP Morgan, Chase and Standard Chartered, Leighton founded another agency broker, Mirexa Capital, in 2014.

Having spent three years at the helm of the firm, he left to found DeepWell last year. We spoke about how he views DeepWell’s success so far, discussed the firm’s plans for the future and got an insight into what those seven new employees are going to be doing.

You previously founded Mirexa Capital, another agency broker similar to DeepWell, what drove you to start afresh and found DeepWell?

The agency model has grown in popularity in recent years as it offers various benefits when compared to the principal model. Unlike banks, agency brokers do not take positions, and so there is no conflict of interest. Their role is to purely to match buyers and sellers, removing any doubts around trading behavior and offering a transparent and trusted execution model.

We recognized there was a gap in the market for a bespoke agency broker that caters exclusively to the buy-side. DeepWell Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term Management’s innovative model provides a tailored service to buy-side institutional investors and ensures the best execution. In addition, all DeepWell FX trades are cleared through a prime brokerage model that ensures full anonymity for all our customers regardless of deal type.

DeepWell is owned by the Swiss interdealer broker, Tradition. How did you work with them on setting up the business and what is your relationship with them?

In developing DeepWell, we worked closely with Tradition to Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term its technology resources and other support functions to create a new model for agency broking. Although DeepWell sits under the Tradition Group of companies, it operates as an independent brand in a separate location and completely independently of the interdealer broking arm.

You’ve only been operating for about a year, how would you quantify your success thus far?

We are extremely pleased with the progress we have made to date and are looking forward to continuing to build on it with our newly expanded team. Financial markets are constantly evolving in response to regulatory and other changes; traditional participants are modifying their businesses, relationships with, and their ability to service customers.

The industry is also entering a period of extensive market evolution, with regulation such as MiFID II bedding in, a revamping of Dodd-Frank taking place in the US, and principles-based rules such as the FX Global Code all having a profound impact on trading and market behavior.

The significant demand we have seen for our services has enabled us to hire first-class senior executives, and we now employ a team of 15 across Europe, Americas and Asia Pacific. Now that we have the right people in place, we are focusing on growing our market share in FX, our overall client base and expanding into other assets.

Thus far you have confined yourself to the FX arena, what plans do you have to expand beyond that market?

We currently offer a full range of FX products – spot, forward, non-deliverable forward, FX options and exotic FX options – across all major and emerging market currencies.

To date, we have been focused on the FX market, but we now have the expertise and resources in place to enable us to grow our client base and serve institutions and investors operating in other markets, with a particular focus on fixed income products.

We expect to see continued strategic additions across Europe, Americas, and Asia Pacific throughout 2018. We plan to roll out cleared interest rate swaps and government bonds by the end of this year and will look to add additional products as dictated by customer demand.

DeepWell recently went on something of a hiring spree as you announced the appointment of 7 very experienced members to your team. What do you hope to achieve with those new staff members?

We were very pleased to be in the position to add seven senior executives to our team. Each brings a wealth of experience and have worked for some of the biggest banks and financial institutions in the world including Credit Suisse, Deutsche Bank, Morgan Stanley, RBS and Standard Chartered. We are very pleased to welcome them onboard, and even at this early stage they are each having a very positive impact on the business.

These additions will allow us to continue meeting the demand we are experiencing for our services and will help us to grow our market share in FX. Growing our capacity also enables us to service more institutions and investors and look at expanding other markets and products.

Along with those new hires, you have opened offices in Singapore and the US. Taking into account your European offices, in which region do you see the greatest potential to grow DeepWell’s business?

While we are headquartered in London, we have experienced significant demand from all over the globe, and this is why we have staff in London, Switzerland, Spain, Singapore and New York.

We took the strategic decision to set up offices in three of the biggest FX hubs in the world as we believe these have the greatest growth potential. We expect to grow our team at each of these locations as we continue to increase our market share in FX and expand into new asset classes.