Kim Hunter talks to JPMorgan's new global structured products chief Giles Rothwell about past successes and future challenges.
So, did he end up working in advertising, after all? JPMorgan's new global head of structured investments distributor marketing Giles Rothwell is telling me of his new task to build a global derivatives brand at the bank. "Maybe I did," he smiles.
With the confession of this early ambition, his subsequent career has become clear. Rothwell is the consummate good-guy salesman - complete with twinkling eyes and boyish smile - and looking back on his working life, despite the periods spent as a trader or money manager, it is his ability to build a sales operation, to help build a brand, to win people over, that stand out.
A conversation about his career path is awash with references to players from the early days of the UK industry, not least of whom is our own MD, Robert Benson. The pair claim to have created the UK's first retail structured product, a guaranteed equity bond for Midland Life, while at Midland Bank. (Challengers to the title, please get in touch...)
Having failed to find a suitable advertising post following his business studies degree, Rothwell took a position as an FX spot trader in 1985 with a small hedge fund, followed by a stint at UK fund manager Crown Agents, managing colonial money.
From there he moved to Euromobiliari, which was bought by Midland Bank (which was ultimately bought out by HSBC), and then to BZW, where he moved 'downstairs' to the newly-formed Barclays Capital after BZW left its equity derivatives business 'hanging in mid-air' following the sale of cash equities to Credit Suisse.
Along the way, he has traded FX and FX options, equities, warrants and long-dated options, run a volatility arbitrage book and been a fixed income fund manager.
At a business level, he has also had his share of excitement and challenges. Following the success of that early life-wrapped product, he worked with Robert Benson to establish Midlands' specialised derivatives group and later the specialised trading and research desk. Back in these earliest days of the industry, it was a complex job to make the assets efficient in a life fund. Nevertheless, he says, "We thought it was a good wheeze."
"That whole experience was very creative. There weren't many doing it - just us, NatWest, Midlands - then UBS came in and killed everybody on price," says Rothwell.
At BZW - the blue-blooded stockbroker he describes as a 'culture shock' - Rothwell established a structured products business, as well as being responsible for index trading. This, ultimately, led to his biggest achievement to date, developing the successful global investor solutions business at Barclays Capital.
"It took a long time," says Rothwell. "I got rid of trading and refocused on developing sales and structuring for institutional and retail structured products for a UK client base." Having managed to make a success of the UK operation, he created a pan-European solutions sales team. Because the head of equities didn't want to trade exotics, the team then established the fund derivatives desk that would later become a key strength, though it was later moved back into trading. "Necessity is the mother of invention," Rothwell reminds us. The pensions side of the business was later split off, while Rothwell focused on the retail side with the newly-named Investor Solutions team and was given a global mandate.
Fortuitously, this coincided with the expansion drive Project Alpha, of which Investor Solutions took its fair share. Barcap was also one of the first to passport Ucits III contracts to Singapore. It created Woolwich Plan Managers to get closer to customers via IFAs, expanded the warrants and certificates programme in Germany, established a private banking business, and built an e-commerce platform on what Rothwell describes as a 'shoestring'.
At the end of 2006, Rothwell made one final change. Having created one of the biggest and most profitable businesses in the UK, he felt the upside was limited, so he split the team and created a joint venture with Wealth Management.
Four months into his post at JPMorgan, Rothwell has already put his experience to good use, as he takes on the task of pulling together JPM's structured products activity into a single-minded global business.
This time, though, he isn't allowing himself the luxury of time. "What's the five year plan," I ask him. "Five years? Two years," he replies. "In two years we will be number one globally... You know me, I like to do something new. Besides, we don't have to do a lot to be number one." He smiles.
Fortunately, for one making such a bold claim, Rothwell says all the parts of the puzzle are already there: "Here, we have a far better brand overall," he says. "It's far bigger, of course, and has a global reach. The trading platform is better in some asset classes. There are a lot of smart people, the team is in place and we have a lot of commitment from senior management." The bank has also built a tier one client base, which gives it a sound basis and reputation from which to diversify into the middle markets.
Making the business scalable will mean working on product delivery, and examining individual workloads (the sales team had to do a lot more than might be expected in terms of running the business in the past). Technological development, particularly click and trade solutions, is required to create 'the most efficient widget-making platform' for flow products and at the same time Rothwell is focused on continuing to build on JPM's reputation as a leader in innovation.
In Europe, the bank is playing a client diversification game, and also looking towards the listed markets for expansion. Rothwell wants to make the business much more retail oriented and thus is talking to smaller distributors, investment advisers and IFAs across Europe, as well as globally. He will also build a small team of experts on the pensions side, and, in common with other banks, work on 'life-cycle' solutions.
The regional organisation of the business will not change: the US is run by Nicky Tippins, Europe by Beat von Gunten, Japan by Ohkoshi san and Rothwell is about to hire a regional head for Asia. "Emerging markets are a huge opportunity," he says. Rothwell has his eyes on Turkey, Latin America and some of the East European countries, as well as the more obvious Far and Middle East.
"In the US, we've got a pretty good business, and will focus on leveraging the internal network," he says. Chase is a big opportunity, as is the team's good relationship with JPMorgan Private Bank. Rothwell will also focus on building a third party business among registered investment advisers, develop the ETF business and expand north into Canada and south into Latin America.
Meanwhile, he also plans to build out JPM Structured Fund Management (whose name is about to change), a passive, wrapping vehicle, which will continue to build on the firm's leadership in bond indices, for example, as it expands its ETF list and extends into Asia.
It is quite some list, but looked at from another perspective, all Rothwell needs, he says, is serendipity and the willingness to adapt and change as he forges a common identity.
Back to advertising again, then.