CEO MONTHLY / AUGUST 2017 31 John then provides some valuable insight into Mercury’s approach when undertaking a new client or project – explaining to us how the firm ensures that the needs of those they serve are always met. “We are fortunate - in that often- potential clients - approach us via recommendations from their respected contemporaries. This saves us both the time and money that others may spend advertising or chasing clients, so this means that we are already halfway towards gaining their trust. Mercury also works closely with such prospects, to ensure they understand how we work, the need for focus and calm reflection, as well as the open window for adding value to the thought process. “In the same way that investors assess whether an asset manager is suitable for their needs, we strive to ensure that they are suitable for Mercury. Therefore, we view our investors as partners, providing them with access to opportunities unique in the world of investment, whilst they in turn provide us with capital and support.” John then reveals the ongoing strategy of Mercury, including the techniques used to ensure that this is achieved. “At the risk of stating the obvious, our strategy is simply to provide the right product to the right client at the right price, with an acceptable level of return. From a trading point of view, we apply a strict risk management approach, for example, we typically would not risk more than 0.3% on any one trading idea. We also focus in our area of expertise, the G7 currencies and their crosses, which gives us plenty of opportunity within those 28 currency pairs to produce alpha. “Our portfolio managers have the tools to understand the worst-case scenarios - in all possible trading situations - but they are encouraged to use their own initiative alongside the programmes and analytics developed by Mercury. Meanwhile, I personally oversee the central risk management book, For the Love of Trading g help them manage their positions and for example, alleviate their concerns on a gap move in the market. “Instinctively Mercury doesn’t chase returns or the market, rather we can allow the trade to come to us. We wait, and if a given level is not reached, the trade is not initiated. Mercury’s mantra is ‘Plan the Trade, Trade the Plan’. “Other than risk management, another of my key roles is that of mentor providing the right level of coaching, support and development to all employees across the firm. By taking this approach, this ensures that we maximise their potential and avoid the ‘square pegs in round holes’ scenario.” John then imparts his thoughts on the state of the industry currently and provides a flavour of his leadership style as a CEO. “Regulation is the factor that immediately springs to mind. Of course, it is a prerequisite for the financial services industry, but is reaching critical levels from a resource perspective. Whilst protecting investors and especially the ‘little man’, it is clearly vital that the resulting cost impact is forcing some smaller firms to exit the business. It also creates a barrier to entry, thus concentrating assets in those larger firms, reducing investor choice and resulting in a less competitive market. This creates a barrier to entry, that is causing concentration of assets in larger asset managers, reducing choice for investors. Additionally, a market is always healthier for a wider and broader group of participants, engaging within it. “As CEO, I aim to consistently be a role-model to reflect Mercury’s core values; communication, focus, patience, delegation and the environment. The more experienced I become, the more I value listening. We have an investment committee at Mercury, consisting of long-term stakeholders with whom I regularly communicate, so this hopefully provides a valued sounding board for new ideas in a forum that encourages both a calm and reasoned debate. Likewise, I adopt a similar approach with my team of experienced portfolio managers. At Mercury, we also try to maintain a balanced lifestyle approach since tension, nervousness and uncertainty do little to deliver peak performance in any business. “Also, as a manager, I create a safety net for my portfolio managers that work within Mercury by ensuring they know the worst-case scenarios in all possible situations from trading. As I personally manage the central risk management book, I help them manage their positions and take away the concern they could have on a gap move in the market for instance. Additionally, for the members of the team that have come up as juniors, I make it clear to them that should they fail, this is because of my shortcomings in teaching and mentoring them. By doing this, I act to underwrite their development, recognising that a role for them could be in a support function as opposed to front line trading.” John then reveals the challenges and opportunities he has faced during his time as the CEO of Mercury. “It is impossible to manage a financial services business currently, without a robust operational infrastructure. Mercury’s state-of-the-art technology allows our portfolio managers to access a fully functioning remote office, staffed by a strong middle and back office as well as both effective legal and compliance support. I believe that this solid infrastructure is our firm’s bedrock. “We have also built strong and lasting relationships with Mercury’s auditors, lawyers and regulators. Effective engagement with the latter is especially important, not simply to remain compliant, but also to be part of the discussions to positively influence future regulatory change. In closing, John is eager to reveal the firm’s future aspirations and his own thoughts about his career as a senior leader. “Going forward, Mercury want to keep carrying on with what we’re doing. We want the business to continue to grow its AUM, whilst realising consistently above average returns for clients. Where it makes sense, I have always traded in a contrarian manner and will continue to do so. Similarly, I will continue to create, refine and enhance our models and methodologies to inform our trading strategies. Continuous improvement is critical, so I am constantly learning from the market, our staff, investors and stakeholders. “Mercury is not my job, is not my career, it’s my life, family excluded of course. I thrive with the challenge of being at the very heart of my own business and enjoy the regular interactions with my team and with many of my high net worth (HNWI) clients - whom I consider both friends and mentors - and with the various charitable causes we support. Personally, I have no plans whatsoever to retire! “I am very proud of what we have created at Mercury over the past 20 years or so. It is a continuing and huge success story that has produced average gross annualised returns of 16.6% for our clients – a factor that makes investing in Mercury extremely attractive as part of a balanced investment portfolio. I have developed a working environment that suits me and have extended it to the rest of my team, to allow them to operate at their highest potential. I revel in the fact that Mercury stands out from the herd and does not follow convention. Indeed, Mercury longevity, performance and deep investor relationships are testament to that.” Name: John Birkins Email:
[email protected] Web Address: mercuryforex.swiss Address: Churerstrasse 135, CH- 8808 Pfäffikon, Switzerland