Global commodities broker Marex Spectron has launched Marex Solutions, a new business line dedicated to providing customised derivative hedging solutions for clients.
Marex Solutions will offer clients fully customisable over the counter (OTC) derivative solutions to complement the existing off-the-shelf exchange and OTC traded hedging instruments that are already available in metals, agriculture and energy via Marex Spectron.
The new division will service clients around the world and is led by Nilesh Jethwa (pictured), Marex Solutions' chief executive officer, formerly of Leonteq Securities, where he held a number of senior roles including global head of trading in charge of managing trading, treasury, quant and pension risk globally, and head of the firm's structured solutions division.
"Marex Spectron's name is synonymous with quality commodities broking, with leading teams and coverage across agricultural, metals and energy products," said Jethwa. "These advantages, alongside the extensive experience of the Marex Solutions team and cutting-edge technology, makes this a hugely exciting business."
Typical solutions to a client's hedging requirements will range from basic currency overlays, through to the full suite of participation, protection, price improvement and range extraction solutions, offering clients virtually "unlimited hedging flexibility", across, commodities, equities, FX and fixed income.
"We can transform the natural supply and demand in the listed markets into products that deliver more precise requirements a client may have, whilst still allowing clients to convert their OTC solutions into listed futures or options, creating highly portable hedging solutions," said Jethwa. "Tailored OTC solutions allow a client to create a unique hedge which can offset their exposure more precisely than exchange listed instruments. The ability to leverage the global market coverage of Marex Spectron allows us to combine deep and cost efficient execution with tailored investment solutions."
Marex Solutions which is a specialist division of Marex Financial Limited, a company authorised and regulated by the UK Financial Conduct Authority (FCA), has also plans to develop a structured investment products platform in the near future.
"As a specialist manufacturer and service provider of tailored risk management solutions, our technology platform is designed to give clients full transparency and control." said Jethwa. "We will take the best characteristics of a high-end structured investment manufacturer, strip out the complexity and cost, and provide it to [our clients]."
The new platform will provide clients access to a complete range of products, covering multiple asset classes, and a 'robust counterparty' with a large balance sheet and a plenty of excess capital, according to Jethwa.
"As a pure structured solutions provider, Marex Solutions has no proprietary trading mandates which means that clients will get a consistent, fair price on every transaction both when opening a new investment but also closing or restructuring an existing structure," said Jethwa.
According to Jethwa, Marex Solutions has no legacy infrastructure, and has benefited of recent fintech innovations and partnered with a number of 'leading firms' in quantitative analytics, real-time derivatives calculation, life-cycle management and documentation automation to develop a 'highly efficient, flexible and low-cost offering, which provides high-levels of client service and transparency'.
Ian Lowitt, Marex Spectron's chief executive officer, said the addition of Marex Solutions expands the range of services Marex offers to its clients, extending its existing hedging services in futures and options to more customised derivatives, while capitalising on the vacuum created by banks retreating from the derivatives segment.
'As banks exit, or reduce their participation in these markets, many clients have unmet hedging needs,' said Lowitt. 'With new technology and Nilesh's team's capabilities, we now have the potential to provide clients with a very high level of services and innovative solutions.'
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