Interview with James Alexander & Nick Briscoe – Invast Global is a premium, multi-asset prime services brokerage serving the needs of hedge funds, retail brokerages, high frequency trading firms and sophisticated clients. The company provides access to industry-leading OTC FX and Commodities liquidity, along with synthetic DMA access to over 30 global stock and futures exchanges. The Invast Global PurePrime facility, with optimised liquidity streams and connectivity options is designed specifically to meet the needs of small and mid-sized trading firms.
The company has experienced rapid expansion over recent years as demand for prime services grows strongly amidst a regulatory-driven retreat from prime services by the Tier 1 banks.
What makes Invast Global a superior alternative to traditional prime brokers?
We focus on being responsive and flexible. That is definitely our niche. We are squarely aimed at meeting the needs of small and medium-sized firms that are being overlooked by the large Prime Brokers, as regulatory reforms begin to take effect.
If a trading firm is lucky enough to be accepted by a Tier 1 PB, they are increasingly being hit with prohibitive minimum commission hurdles and other requirements and constraints. All of this is the outcome of the post-GFC regulatory reforms aimed at reigning in the banks. These reforms will continue and are planned to be increasingly restrictive over time. They are shaping the prime services landscape for decades to come.
Invast provides an alternative for clients who are struggling to remain relevant to their Prime Broker. Being a specialised brokerage allows us to be more agile. We can provide prime services with the same integrity as the top-tier Investment Banks, but with more responsiveness and attentiveness to the needs of individual clients.
We have an overall philosophy of transparency and innovation at Invast Global – that is, we want to keep offering our clients more and more innovative solutions to meet their trading needs. And we want to give clients the information and control to allow them to shape their own trading environment. Our recently announced partnerships with the world's leading non-bank market-makers, XTX, GTS and Citadel Securities are examples of how we are thinking ahead on behalf of our clients and giving clients access to liquidity sources which are not normally available to the small/medium end of the industry.
What makes PurePrime a unique offering in an increasingly saturated market of non-bank PoP providers?
We named our premium multi-asset prime services facility PurePrime because it is the most transparent form of prime services a client can access without a Tier 1 prime broker. As part of PurePrime, we offer optimised liquidity streams aggregated from over 20 unique bank, non-bank and ECN liquidity providers. Clients can structure their liquidity in real-time, with full pre and post-trade disclosure to live streams from our liquidity providers. Backed by two Tier 1 prime brokers, we have designed a suite of bespoke collateral solutions and leverage arrangements customisable to the requirements of each client. Our six-decade Japanese heritage translates into industry-leading connectivity solutions, encompassing servers in NY4 and LD4 for ultra-low latency via multiple GUIs or API.
The offering is supported by a highly skilled team with deep Prime Broking experience and a responsive culture. Our focus is on giving clients control, so that they can customise the offering to meet their specific needs. PurePrime offers an opportunity to access the world from one account. The large Investment Bank PB's are stepping back and nimble, innovative Prime Services firms like Invast are filling the void.
You speak of transparency and control as distinct advantages of PurePrime. Could you expand on this further?
We offer a number of platforms depending on the asset class the client is focusing on. We have a comprehensive synthetic equities and synthetic futures platform, which gives our clients long/short DMA access to 30 equities and futures exchanges across the globe. The beauty of the synthetic nature of the trade is that multiple exchanges and asset classes can be traded from the one account and one pool of collateral.
We have an extensive borrow inventory sourced from our PBs, which is loaded pre-market, allowing for easy one-touch shorting. Client orders interact instantaneously with the underlying exchange's Order Book. Clients can see where they are in the exchange queue and know immediately when their order is filled.
All trades are reflected in the official ™Course of Sales∫ of the underlying exchange. It is the most transparent and accountable way of trading synthetic equity and futures – which is why PurePrime is so popular amongst hedge funds and HFT firms.
Our OTC FX/Commodities offering is especially unique and has experienced amazing growth over the past few years. It is certainly shaking up the FX prime services industry. This is because we give our clients a level of control and degree of transparency that is unprecedented in the FX prime space. For example, we give clients access to more than 20 bank and non-bank FX Liquidity Providers (`LPs') and allow clients to structure their own liquidity mix in real time, with analysis and advice from our expert liquidity team. Clients are able to see the real LPs within their aggregated feed, both pre-trade and post-trade. This is revolutionary transparency for FX prime clients.
What assets does Invast Global have that distinguishes it as a premium PoP provider, compared to smaller firms that are expected to gradually disappear?
Staff, technology, prime broker relationships and balance sheet. We know the FX and Commodity LPs intimately. Most of our staff have worked at the Investment Banks who are streaming us prices. Our Head of FX Liquidity, Geoff Last, is arguably the longest serving (and most respected) institutional FX dealer in Asia Pacific.
We utilise numerous institutional systems to provide a wide range of connectivity choices for our FX and Commodities trading clients. We have servers in two Equinix locations – LD4 and NY4. We offer the highest quality API connectivity to industry leading aggregators and bridges, such as FlexTrade, Integral, PrimeXM, etc, with cross connection and co-location options.
Invast is backed by two Tier 1 prime brokers – Barclays and Deutsche Bank. The stability of relationships with Tier 1 FX prime brokers and liquidity providers will only become more important as regulations tighten and access to Tier 1 PBs becomes tougher. We also offer fully disclosed, aggregated bank and non-bank liquidity from over 20 liquidity providers. We have announced partnerships with XTX Markets, GTS and Citadel Securities, illustrating how Invast Global is pioneering access to the powerhouses of non-bank liquidity.
The fact that our parent company, Invast Securities Japan, is a 60-year old, highly capitalised listed entity is definitely helpful in securing a good deal with our PBs and LPs. These firms know we represent a solid counterparty. In addition, we STP everything straight through to the LPs, which means we do huge volumes with our LPs and represent a valuable relationship to them. We have no mandate to take on market risk ourselves and pride ourselves on always aligning our interests with our clients.
The client mix of Invast Global is primarily institutional clients – brokerages, hedge funds and sophisticated traders. How does Invast Global provide research capabilities to support the buy side community?
Research is important, particularly as many of our clients are not of a size where they can efficiently develop multi-asset research capabilities in-house. So we have invested in a top-tier research team, staffed by some of the most experienced analysts in the industry. Their focus is on providing high conviction, actionable advice.
Around the clock, the team is constantly monitoring global markets and debating trade ideas. Our clients benefit from daily access to the ™live∫ discussions amongst the analysts via the client-only ™Hot Notes∫. Separate research teams cover the various equities markets across geographic regions, as well as the macro asset classes of FX and commodities.
What is your vision for Invast Global?
We recognised early on that there was growing global demand for a non-bank firm offering professional, transparent prime services for multiple asset classes with the same integrity as the top-tier Investment Banks, but with more responsiveness and attentiveness to the needs of different clients – particularly the smaller firms.
Since recognising this gap and setting about building a transparent Prime Services firm, there has been an industry-wide contraction in the Prime Broking industry due to regulatory reforms aimed at restraining the too-big-to-fail top tier banks. This has meant a lot of clients have needed an alternative. For Invast Global, it's been a case of being in the right place at the right time, with the right offering. Considering the continued transformation of the industry, the future is full of opportunities for us.
