Hooked on trading

Thirty years ago Gavin Prentice visited the LME as a schoolboy and the love affair has not stopped for the MD of broker Marex Spectron

PUBLISHED : Monday, 03 December, 2012, 12:00am
UPDATED : Monday, 03 December, 2012, 4:26am

It could have been the full-throttle cries of the traders, or probably their dramatic hand gestures. Whatever it was, Gavin Prentice was instantly hooked while on a chance visit to the London Metal Exchange trading floor during a school holiday.

And even after 30 years in commodities trading, that initial attraction has not worn off for the managing director and global head of sales of commodities broker Marex Spectron and board member of the LME.

"This is a people's business and I love it," said Prentice in an interview with the South China Morning Post at his Bishopsgate office in London.

Prentice, who has just turned 49, has virtually spent his entire adult life in commodities trading. After finishing his A-levels at 18 he joined commodities company Amalgamated Metal Trading (AMT), a category 1 ring dealing member that allows firms to participate in open outcry trading at the ring on top of electronic and telephone trading.

He started as a clerk before becoming a floor trader. He went on to work as a metals trader in New York from 1988 to 1993 and returned to London in 1994. There he held a number of senior positions before being appointed global head of metals at Refco Overseas in 2002.

Prentice became the head of metals for Marex when the company was established in 2006 and, following the company's merger with the energy trader Spectron in 2011 to create Marex Spectron, is now the managing director of the entity's London office and global head of sales.

Marex Spectron is the largest broker on the LME in terms of trading volume. The company, which was acquired by private-equity firm JRJ Group in January 2010, has significantly expanded its capabilities in product offering and geographical footprint with two more acquisitions - the global markets division from Eden Financial in July 2011 and Schneider's pro-trader division in July this year.

At the LME, Prentice is a member of the board and is chairman of the aluminium and nickel committee. He has also sat on the board of the LME's charity committee.

Marex Spectron holds an annual charity day when the firm raises funds for worthwhile causes. This year it raised US$900,000 and picked Hong Kong charity Mother's Choice as one of the recipients.

"It's an incredible achievement in these difficult times and the effort is an example of Marex Spectron and its clients' efforts to do good in Hong Kong and the other regions that we operate in," Prentice said.

Prentice's passion for the job is evident. It goes beyond looking at a computer screen and clicking on a few buttons to trade, as he puts it.

"The most important thing for Marex Spectron is our relationships. I have to fly around the world to meet clients and understand their individual business needs before advising them. Many of these customers are companies with whom we have a long-term relationship."

Marex Spectron, which is the largest broker on the LME in terms of trading volume, has more than 600 employees around the world helping customers to trade all types of commodities from agricultural products and base metals to energy and also foreign exchange.

Its Asian headquarters is in Hong Kong and it also has offices in Singapore.

"Hong Kong is an important place for our business as it is close to mainland China. We have seen an increasing number of Chinese customers in commodities trading," he said.

Prentice, who understands the importance of customer services, knows it is vital to have team members who know the local language to serve customers.

"In our Hong Kong and London offices, we have people who can speak Cantonese and Putonghua to serve Chinese institutional and corporate clients who wish to trade on the LME," he said.

The LME offers trading using the traditional open outcry method, by telephone or electronically. Marex Spectron is a category 1 member, which allows it to use all three methods.

Prentice said most Asian customers can now trade through Marex Spectron's electronic and telephone channels.

While many international exchanges, including the HKEx, have abandoned open outcry to move fully to electronic trading, Marex Spectron said LME has maintained the open outcry system as some customers preferred to trade that way.

"This is a service industry and we have to provide what the customers want," he said.

"The LME has also invested a lot of money in upgrading its electronic trading system to provide a high-speed trading platform for customers who like to trade electronically."

According to the terms of LME's acquisition, HKEx will not make changes to the open outcry system until at least 2015 but many Hong Kong brokers believe that eventually electronic trading will become the London bourse's major trading platform, going by the international trend.