Newedge expands in Asia despite gloom

French brokerage Newedge has made two senior appointments in Hong Kong and Singapore as it continues to grow its business in the region following its creation in January 2008 from the merger between Calyon Financial and Fimat, the brokerage arm of Societe Generale.

Since the merger, Newedge has focused on building capabilities in prime brokerage, foreign exchange and metals to diversify away from its core business of listed futures and options. As a result, the firm has grown in Asia despite lay-offs in some of its existing product businesses, with headcount rising from roughly 500 at the time of the merger to 560 today.

"The futures and options market is reducing globally," says Pierre Gay, Asia-Pacific chief executive at Newedge. "Year-to-year it's 40% to 50% of the volume, so it's fortunate that we started this diversification more than a year ago. These new products have helped us to generate more revenue."

To better manage this growth, Gay has given up his responsibility for the Hong Kong office to focus on his regional management role. Toby Lawson, who was previously the Australia country head and comes from the Fimat side of the business, will take over the Hong Kong job. The move is also driven by the fact that Hong Kong will serve as a better location for Lawson's continued role as regional head of the futures and options business. He is succeeded as country head of Australia by Nick Scarf, who joins from MF Global in Sydney.

Meanwhile, Jerome Burban takes over the Singapore office, replacing Thibault Mudes who is now acting as a consultant to Rick Ferrina, Newedge's deputy chief executive. Burban, who was also originally from Fimat, has spent the past four years in Mumbai as head of the Indian business and will continue to oversee that office from Singapore.

The merger between Calyon Financial and Fimat gave Newedge a footprint of eight offices in Asia and, says Gay, this geographic spread is an important part of its business. "What's very important for us is the coverage for our customers," he says. "You need to centralise some operations, but it's very important to keep your sales people close to your customers. This local presence is key for us."

One of Newedge's growth markets is China, where it is one of only two foreign brokers on the ground through a joint venture with Citic East China. J.P. Morgan is the only other active foreign broker in the country.

Back in January 2008, Newedge launched its new identity with the boast that it would double profits in three years and launch an IPO in two. Gay is still confident that the business will hit its target for profit growth, but the IPO plans have long since been scrapped.