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You are listening to investing matters brought to you in association with London South East. This is the show that provides informative educational and entertaining content from the world of investing. We do not give advice, so please do your own research.
Peter Higgins 00:17
Hello, and welcome to this Investing Matters Podcast. My name is Peter Higgins. And you can find me at Conkers3 on Twitter. And I'm here with Mike McCudden, CEO of InfinitX, we're going to be talking about the platform, what it does, how it why it's important for capital markets and private investors, startups and entrepreneurs. Mike's got a fantastic history. I'm going to delve into that a little bit as well. But first, hello, Mike, how you doing?
Mike McCudden 00:53
Good. Thank you. Happy Friday, sun is shining here in Glasgow. Good speak to you.
Peter Higgins 00:58
Good to speak to you from Glasgow, Mike, I want to start this interview because you've got a fantastic history, which I want to delve into a little bit. I want to start first with your first job having graduated because you did a degree in risk management and that seems to be a thread throughout this conversation and what I wanted to start there. Please share with us the background behind that. Why risk management what it led to? And then your first job?
Mike McCudden 01:24
I think because at uni nobody else would take me and that was the one that was available. So I studied risk management and I guess through that I kind of developed.. I think I was 18/19 and developed an interest in financial risk, financial risk management, which was capital markets and down that rabbit hole and I'm still down there somewhere at the moment. So that was my journey into risk management back at Glasgow Caledonian Uni, wee shout-out…
Peter Higgins 02:01
Brilliant now, not sure if was your first job or not, Aitken Campbell and Co Senior Market Maker now everyone's got these different ideas about what a market maker is. You went in there, and you're also became a Senior Market Maker, so just cancel out some myths. But also tell us a little bit about what a market maker does, please?
Mike McCudden 02:24
Well, I don’t want to forget McDonald's. I mean, it was there for a few years as well.
I learned a lot, but yeah, I fell into it gave up McDonald's going into the market making game, actually after I planned to leave uni I had a summer internship with a company called West Hill Panure.
So, I was thrust onto the trading floor there. And I found it a very eye-opening experience.
And then after uni, an opportunity came up for from that I'd actually never heard of called Aitken Campbell and Company and that was, it was one of the old market makers actually originally affiliated with the Scottish Stock Exchange, which was in Glasgow at that point I mean, it's 100 year old business, you know, it was around for a long time.
And I went into that really eyes open, not really sure what a market maker or a stockjobber was or, or any of the other terms are used for it.
So yeah, so I get a job in there.
I think they were paying me about 11 grand a year.
And it was basically tea boy, assisting the market makers and I just loved the contrast of it, the environment, the risk, the stress, the everything really about managing all those orders that was coming through from brokers and various other you know, intermediaries and whatnot.
And you are there making the price and very quickly, I can go to grips with it. I then got my first book, as they call it.
So I managed… what did I manage again?
Miners to breweries to telcos, there was probably about 50 stocks, right?
So the job of the market maker, really a competing market maker at that point, we were all plugged into the London Stock Exchange was to compete on the bid offer spread with other market makers, there was another 15-20 or so around at that time, all varying different sizes.
And you know, we were a full-size market maker as they were called, and you had to make a price you were a bookie essentially, to follow the stocks, you get to know them intimately. You understand the behaviors of the other market makers, you're there primarily as a group to provide a price provide liquidity to make sure the market works and that is the regime we've been operating in the UK for forever really.
And you know, I loved it absolutely loved it, I was there for 6/7 years.
We were bought out in 2001 probably two years into it by a consortium led by Charles Schwab and TD Bank and we became their kind of UK market maker.
So yeah you know, we were a big player really enjoyed it love the risk and a market making them was a little bit different to what is now but yeah, I certainly loved it. I loved it. best job ever, as we always say.
Peter Higgins 05:48
The best job ever? So can you just quell some of the myths about what a market maker can and can't do the there's certain institutions out there, fund managers even and even obviously, retail investors. We've got this thing about oh market makers have done this to my stock? And is it just complete nonsense?
Mike McCudden 05:55
Yeah, well, no idea where that comes from really, market makers have done this to my stock, and you're probably talking to maybe a CFD spread bet trader or something.
Now that can be quite different because certain companies will make their own market, which is away from the non-market makers who make their own price and maybe they're complaining about that, I don't know.
But certainly market making since I was around, so pre 2008 actually really firms, jobbers, market makers, whatever would take on a lot of risk and supply of liquidity.
So we had something called the back book. And you would run pretty large positions nowadays, as far as I'm aware, but you know, sure somebody will correct me if I'm wrong, there's not as much risk taken on.
And that's how it will be mandated through a lot of banks that have market making divisions, so I can understand it's probably a little bit more volatility, the spreads probably a little bit wider.
But certainly back in my day, I had to be on point for a price.
So if my phone went off, it was either another computing market maker, you had a large order to fulfill at a set price, and that was between him and his client.
And then you've kind of got a wee bit of second guessing at that point. So you may get a phone call from Goldman Sachs, whoever say, right, what's your price in size in a particular company, which means that there is a kind of normal market size it caught up to if you're a full size market maker, then it folds up and wants something a lot larger.
So you've got to think about what have I got my back book was the overall risk position of the firm, you got to take all these things into consideration and about four seconds, give the guy an answer, see what you meet his price, do a bit of negotiating, and then you'll see the market adjust accordingly.
Because he's not just not phoning me, he’s phoning everybody else, you know.
So there's a bit of that and I just love that because every day was completely different.
You didn't know what you were going to hit with, you know, you could be sitting with large amount of stock in a particular company, and some really good news, or alternatively, some really bad news may come out in that particular company, it could be a profits warning, premarket or something, and you go in and you go, oh dear, that position I've got I'm holding a few million shares dropped 25%, I’m going to have to do something about that.
So, you know, things like that certainly continued sparked my interest and I worked with a bunch of great people you know, we had a good laugh, and it was stressful.
It was you had everything you would want and I went from a kind of shy little boy coming out of university to somebody who was broken and rebuilt, I guess.
You know what, I was good at it.
So I rose through it fairly quickly to a senior market maker positions, I had a bunch of other market makers reporting to me, so I'm managing the risk across areas of the firm and all of that stuff.
So it was really, really, really good fun. I've stayed in the industry ever since I still speak to my colleagues, I still speak to people I would trade with and against that, you'd be shouting out one minute over the phone, calling them all sorts and then meeting for a pint in the pub after, it was that is that kind of environment, there was a lot of camaraderie and I loved it. Absolutely loved it.
Peter Higgins 09:34
Thank you. I love that response. Thank you ever so much for giving me that full response I really appreciate it.
Now from there, you know, you said that you got consumed by Charles Schwab, TD, etc. You moved on from that role to CMC Markets as regional head of Scotland, IG, Institutional Sales, and then Interactive Investor, Head of product. Please can you share with us your accumulated greatest lessons from those significant roles that you held?
Mike McCudden 10:09
I certainly learned a lot you know, because you move from basically a market maker to position within for example, CMC Markets were like right you’re now regional head of Scotland, go get an office set up a team sell a product.
And again, that was I like things that challenged me. I guess I got that job with my markets experience.
And fairly at that time, I guess fairly limited knowledge and what you know, leverage trading was and what are all these things?
CFD spread betting and their CMC Markets was a real game changer at the time, gone from deal for free or whatever, in the early noughties to become CMC, and they're now major company led by Peter Cruddas, still a formidable player and then from there went to IG.
So you learned a little bit different company dynamics. I went from a small company really now we were owned by Charles Schwab/TD are massive and we've got small team to working for big companies, big agendas, and big teams and various layers of hierarchies of so that was, for me, a great learning path.
You know, we're managing my remit and reporting into London and you know, just all of that you can understand anyone listening to this will understand the dynamic change the politics and everything else that comes with it.
And I thoroughly enjoyed my time there before I moved into IG, which again, was an even bigger player, still our massive global company, you know, they were absolutely smashed out of the park at that time. I believe they still are, you know, I think Oh, great change another product provider, they wanted me to do something slightly different, which is more focused on institutional relationship management that basically involves other institutions with large client bases, white labeling, or grey labeling or products and whatnot there.
So again, different toolkit, different face on, you know, different client, community and everything else.
But this was all removed from Mike making a price on Marks and Spencer or whatever, quite different.
There was none of that it was more work in a sales team development building unbranded role.
So you learn to walk around product marketing, your client behaviors, big corporate strategy, managing your P&L for your firm, and hiring and firing and all that jazz, you know, not really done before, you kind of thrust me into that light.
So, you know, I enjoyed that. And with my, I guess, with the kind of product side that led me into, that I had a great opportunity came along, really to join Interactive Investor at that point.
Again, they were I mean, in fact, when I joined, it was a beast, but been through a few changes. It was a large kind of financial information website, they had a relationship with a third party, they had dealing for all the share dealing needs.
And then around the time I came along, some of the guys were like we're going to bring this in house.
So they built the whole kind of end to end broking business in Glasgow here, where I am.
So it was a good fit because I could operate from Glasgow with my product hat on and watch this massive project underway, where they're basically building their own share dealing service, migrating hundreds of thosands of customers over into this new way of doing things.
And, you know, watching that grow, so they again, that was just to be around, that was a great opportunity and a great experience, and again, was more focused on product ,what clients want, market trends, would it people trade, and, you know, I would manage a lot more of the more specialist products around whether it be derivatives trading, because obviously, it just came out of IG, and through to structured products, futures and options in all these clients wanted, how do we use our products to attract more high net worth sophisticated investors?
How do we increase our AUA? All of that was close to my heart at the time, and at the same time, in parallel to that I would be a spokesman for Interactive Investor on day to day market moves, what investors were doing, and I loved it, you know, it was fascinating, because instead of being a market maker, you're actually looking at, okay, what, what motivates retail investors with their pension holdings, and all that case, I was, didn't really understand until that point, ISA season, all these things that were all kind of over there, all of a sudden kind of landed in my lap.
So it was our own product, knowing the market working with you know, with a large, you know, marketing division, we had a couple of financial information and news brands and whatnot.
So it was a fascinating business, and then still is, you know, and they were recently acquired by Aberdeen for one and a half billion or something. So, you know, I'd gone on well before that, but around those who were there around 2017/18 and they're still holding heads, as you know, one of the biggest online brokers in the UK, and I watched a lot of that journey happen, you know, on our watch, and you know it was a great team.
Peter Higgins 16:27
Brilliant. So having covered all of that, from being the market maker and having done risk management as a degree, the only thing that's not in your portfolio at this point in time regarding your work is….
Mike McCudden 16:38
McDonald's?
Peter Higgins 16:39
McDonald's as well, yes.
Mike McCudden 16:40
Second best job, working at McDonald’s.
Peter Higgins 16:46
You've not been really involved with privately held companies, per se. So you're now looking at this and the idea comes up. How does the idea come up in the first place regarding formally CrowdX now InfinitX who were just sitting down with what were your thought processes? What was the market you were looking at thinking that's an untapped market there, let's sort that out. What happened, Mike?
Mike McCudden 17:10
Well, it kind of long story actually. So I'm not the founder of InfinitX.
So we are a pure technology company. So I, I've been around the technology and the guys have built technology and everything else, like my whole career.
And I remember in even in my market making days, there was a few startups like ScotX which was around trading in matched bargains and private companies, you have people looking over the hedge going, what do they do and what’s different to what I do? I was old public market stuff.
And you know, liquidity has always been a major talking point throughout my entire career. And I remember even in the 90s, well, I was started in 1999.
But you know, I was aware of the likes of JP Jenkins and their transition into OFEX and the explosion around dotcom and their journey becoming a ISDX Mike Spencer now NEX, ultimately Aquis Exchange in London, you know, through different licenses and whatnot.
But I was always interested in okay, well, how did they do that? How do they unlock liquidity in private companies without them being public?
I didn't know, I now know obviously. So that's always been there, and then I'd met with them, they'd been introduced by a good friend of mine to a chap called Andrew Foster, South African native living in London, strong technology background, he and a few guys with him, that he introduced me to. Now my CTO, Derek.
And these guys have been in around this technology space for their entire careers and supported other public markets, private markets, and everything else, you know, actually writing and coding the technology, the project stuff, so I mean, I'm met up with Andrew and we got on like a house on fire, great guy, everything else.
And he's like, well, okay, well, I've got this over here. This isn't my day job. Do you think you can do something with it?
You know we’ve built technology that powers private markets, and I was aware of, you know, guys in the US, like CartaX you know, NASDAQ private markets.
As soon as I got my fingertips going on Google by that point so I could do much more work.
And you can see the size of these markets in this space especially in the US, Okay, why’s there more liquidity, why’s there more private transactions going on over there then understanding more about the corporate culture over there, employee share ownership, all these things.
And then looking at the UK and looking at the number of players like cap table management solutions, like you know, like Vestd, then the registrar community and whatnot.
And okay, well, how do we use technology over here to drive liquidity, like thy’re doing over there, nobody’s really cracked it.
So with our technology, we knew we were able to crack it because the way things were done traditionally was very manual, very over the phone, Excel spreadsheets, and all the rest of it was we can actually add in a layer of technology that can plug in to the market, and offer that match bargain trading solution to ultimately a wider audience.
So and sell that tech globally.
So as a global tech player, obviously, my background crosses, trading financial markets, to selling tech to other parties, you know, I thought well actually knows a really, really timely opportunity to get thoroughly involved in this space.
And yet, and I jumped to the opportunity, not going to lie to you.
And you know, it was it was a really exciting, really interesting bunch of people. It was right in the middle of COVID and the pandemic, so interestingly I mean, I didn't meet Andrew until about physically meet him until about six months after taking the job as Chief Exec, by that point, we can go on about the journey, it's where we are today in a minute, but it was very exciting.
Because you were in a strange global pandemic situation. I had a box of tricks we needed to formalize a company, get it financed, go through the regulatory hurdles, get our governance in place, get it financed, get it moving, bring in support and the team that needs it around me.
And we're on that journey and we here are a couple of years later, we've just acquired JP Jenkins. And you know, we're going from strength to strength. So yeah, I'm really happy with the journey thus far. And long may it continue.
Peter Higgins 22:28
Brilliant, you've just touched on it a little bit, I went to expand on it. In January of this year, you purchased JP Jenkins, the most recognized brand in the UK secondary market space to private companies. What were the drivers for that acquisition, Mike? And what does it mean for embedding the FinTech technology of InfinitX with JP Jenkins, please?
Mike McCudden 22:54
When the opportunity came along, that was more around optics, just when, you know, it came to me the maybe an opportunity to work at a business. And obviously I knew JP Jenkins were and we felt well as a technology company. We know JP Jenkins was a fairly traditional, non-tech lead model.
It's the most recognized brand in the space in the UK. What if we plugged in our technology would allow us to showcase the technology that we were powered by Crowdx, which now became InfinitiX.
And how do we do that? And you know, in principle, it was a nice idea.
But then I met the team. And you know, I'm more interested in people that I'm a product. So I met the guys who are running JP Jenkins day to day, and we'd love to love the ambition, they can see what we could bring to them, which is really important.
And they got the value add they're buying into the global dynamics of what we can do here.
And you know, after a few months of the usual due diligence, lawyers and all the rest of it, we came to an agreement for an all-share package and an acquisition of the business, lock stock and barrel, just move them into new premises.
And you know, we're getting the motoring and we're doing great, absolutely loving it.
So we want to obviously build it, that team is now given us a presence in London, which is still a very important in this business.
So London's become more kind of front office client relationship management, Glasgow where I'm sat today, or what kind of switch between the two is more kind of back office ops, if you want to call it that, you know, we've got, we've just been through the journey of linking everything up and doing all the fun stuff to get the business motoring.
And yeah, so it's working out really well. Couldn't be happier with the team. We're about to, if you go on website, we're doing a lot of overhaul and the brand and the service layers and the team and everything's there, watch this space coming soon.
And we're working with, you know, a number of silicone financial intermediaries in the space as well. So yeah, we've got lots of good stuff happening. And we're very excited about what the future holds for the JPJ brands, as we build that. And then obviously, what we can do internationally and at home with infinitX and of technology, which is, you know, second to none.
Peter Higgins 25:50
Brilliant. Now, I wanted to touch on because a lot of people haven't dealt with unlisted companies before. Can you describe JP Jenkins as a liquidity venue for unlisted assets in the UK? Which type of assets do you accept and which do not meet your criteria?
Mike McCudden 26:10
Well, it's mainly 95% will be your standard equity in these companies. Generally, the businesses that come to us are kind of been around for a while, you know, the kind of pre-series A, a good governance in place, they're probably have audited accounts, they've get grand plans, they want to IPO at some point in the future, they might be under a little bit of pressure from early stage investors to provide some liquidity and exit.
And that is ideally the kind of client that we work with. Because through our proposition, and service layers, and everything else, it's all about enabling them driving and accelerating their path to exit IPO wherever they, you know, obviously the clients, they run their own business, we provide a service for them.
And it's pretty straightforward. It's really, you know, client comes to us, we meet them, they may have an advisor, or somebody, they might need some external support.
We onboard them, we get them set up and crests, which is, you know, for trading settlement, everything else, we put them onto that system.
And yeah, they become tradable through your broker or through your nominee account, and everything else, different from public. I mean, you can, again, delve into that if you like but you know, there's there's different dynamics around because, you know, most companies will require certain shareholder resolutions good through, amends to the articles of the business, everything else, all this all has to be fully analyzed, walk through the client, and then, you know, putting them on that journey one step at a time.
I mean, it's still a lot quicker than if you want to IPO like two years and a million pounds, you know, this is we are more of a progression stage for these businesses that are on that journey.
And you see the other day, the LSE and are doing are making some announcements around that as well.
So there's a lot of them interest in this space. Going back to the point, you know, I thought it was timely to come in. We're now seeing everybody talking about what we can do in the private space.
Peter Higgins 28:37
Absolutely, it's growing absolutely rapid. I was going to touch on a bit later on about the fact that LSE London Stock Exchange made their own investment in Floww last March as well in that secondary market space.
But I wanted to stick to the private market space and the entrepreneurs and the startups because of a piece of research recently from Beauhurst, the private company research house, and they touched on the fact that the rest of UK saw equity investment fall off 30% last year, you're based in Scotland, Scotland bucked the trend and actually rose by 12.6%.
Mike, do you have any insights into the outperformance of Scotland and are InfinitiX and JP Jenkins going to be taken advantage of those startups and untapped companies within that space?
You know, you're there. You've got the foothold in Scotland and everyone knows of you as well across the country.
Mike McCudden 29:31
Yeah I mean, I mean obviously I'm a Scot obviously passionate about you know, everything Scotland but you know, we run a UK businesses you know, where my entire career has been, well, yeah, so for folks in JP Jenkins it’s primarily UK.
And I guess outperformance with regards to the deal with Floww quality deal. This is a very good, strong, albeit small, perfectly formed investment community within Scotland.
And they do a lot of deal sharing working together. Everything else is there's lots of really good players in the space up here. Par Equity, we could see talk about them, they’re in Edinburgh. Various others, Kelvin Capital in Glasgow, Scottish Enterprise, they’ve got a brilliant system set up.
So yeah, I think you can identify quality. And there's a lot, there's good support layers within the Scottish ecosystem for normally startups.
But you know, companies approach can SME, I mean, that's one of the problems we are trying to address. Because, again, I mean, you'll hear lots people talking about this, you know, back in the good old days, we had 40 odd exchanges in the UK, companies could go locally to raise capital, you know, you wouldn't have had shipbuilding in the Clyde if it wasn't for a local market for raising money and all this good that stories throughout the UK, it's not changed.
But since the 70s, it's become very London centric. And that just means you know, all of these skills are lots of the skills and expertise around larger corporate financing, etc. all went to the square mile.
So you lost a lot of that .
Collectively, we're all trying to redress that. There's lots of great stuff going on North of England, Leeds, Manchester, Liverpool, lots of exciting projects, lots of localized initiatives supporting business, but yeah, think Scotland's bucked the trend, perhaps there could be some outliers there and great opportunities.
You know, we have seen some bigger ones come out of Scotland in recent years. And, you know, Trustpilot, Skyscanner and various others. You know, it's been some pretty good plays.
So, and we've got a growing support network, Fintech Scotland, various others. I mean, there are options for young businesses looking for support, there are plenty people, you can pick up the phone to talk to arrange a meeting, you know, I think that's a real strength in Scotland right now and long may it continue.
Peter Higgins 32:22
Yeah long may it continue, because as you touched on briefly there, Scotland did have its own exchange for a good while. And it's probably one of the last ones that was left in Scotland before everything got centralized down in London.
Mike McCudden 32:36
Yeah, I mean, it was centralized in Scotland. First, we had three or four, Edinburgh, Glasgow, Aberdeen somewhere else, not sure.
They would all centralize to Glasgow to become the Scottish Stock Exchange back in the you know, in 1973, or something.
All before I was born, I mean, and then it was just ultimately swallowed up by London.
So Glasgow Scottish Stock Exchange became part of the London Stock Exchange.
You’ve got the you know, the powerhouse in London.
And it made sense at the time to do so definitely, because of the lack of technology, you'd have a market maker in Glasgow making a different price for market maker in Newcastle and now everything's technology lead, electronic, you can get a real time price, wherever you are in the world, which you know, is doesn't matter where you are, what we need it to be is balanced is support in the pockets of finance available for great businesses, you know, throughout the UK, you shouldn't have to go to London to get financed is what I’m saying.
Peter Higgins 33:55
Brilliant. Thank you for that. So now I'm going to touch on a piece of research here from Jefferies' research. The recently stated that the investors portfolio currently allocated to private markets Mike globally is 24%. What's the estimated size of the whole private markets globally, that InfinitiX and your company can actually tap into this? It's huge.
Mike McCudden 34:18
It's a multi-trillion-dollar market.
Yeah, it changes with every repot you read on it.
But look, it's an absolute behemoth, you know, and also with the transfer of wealth, which is really undertaken right now.
And over the next 20 years or so, it's huge. So there's a lot of whether you call it dry powder, it's a technical term people use for it in the industry.
So that is untapped potential that for businesses through seed investment, an earlier stage and bigger size and have much more transparency around those companies to make them more investable right now as to remit of, you know, high net worth sophisticated, really knowledgeable investors that come into this space.
But yeah, that is changing with liquidity, transparency, the ability to exit, better governance, better regulation around the space, that will change dramatically in the years ahead.
And I think we're certainly very well positioned to capitalize on that, because we can take a tech pretty much anywhere in the planet, we want to go with it, because it's all about plugging in that ecosystem of players wherever they may be in the world, you know, within a regular good quality regulated environment.
You know, we've got business clients we're working with from Germany to New Zealand right now, the US market is still by far and away the biggest place in the world for this so we're obviously making moves to get ourselves in there. And that would be largely through licensing or tech or working on GV relationship with others in the space who are quite involved.
Peter Higgins 36:29
You’ve brought on to two of my questions there. So I'm going to go back to one as in things that are actually in a sweet spot here because the Financial Conduct Authority recently announced a series of initiatives to help secondary market conditions. What were these initiatives? And did they align with InfinitX’s strategic goals, Mike?
Mike McCudden 36:37
Yes, certainly. I think you know, there is well, there's a lot of consultations going on at the moment still around them, certainly made it easier for companies to list the publicly IPO.
But I think our argument is, you know, well actually a lot more can be done in the earlier stages, which is why you referenced more and more involvement from some of the bigger guys in the space with the earliest stage businesses because there's tens of thousands of businesses that can be ready for private markets.
Whereas there's tens of businesses, which are maybe ready right now for IPO.
So in our organisation, we don't want companies to IPO too early, we want companies to go through the journey, generate some liquidity, understand the sensibilities around being public, because that can be a shock to the system to plenty of CEOs and go from running a great private business to all of a sudden, you know, public company.
So there's a whole lot of more requirements around user business, we're that kind of gentle journey into that world.
And with the optics around having liquidity, having an electronic price, having the use of you know, some of our partners like EQS and whatnot to get that market information out there, arrange a company, it's driving value for investors, that also having a sensible, steady approach to public markets is, is we're and everybody wants to do that, you know, and then on the FCA are looking at LSE been looking at it, we’re all looking at it, but you know, this is nothing new here.
They've been doing this for a long time over in the US right now they've got you know, there's NASDAQ with their private markets, CartaX is going great guns, they were a cap table management solution, you know, with building Carta, then it became CartaX, and they've now got a good function for companies looking to put a liquidity solution is still the same old story.
We're always 10 years behind what they're doing the US so let's up our game over here, we can do it.
The regulator understands that the players understand that and, you know, we all get together and do it right?
Ultimately, we want to look after the underlying business, make sure they're coming on to ask the right price point, the right journey to get what we're here to do for them, and, you know, ultimately make their exit or IPO much better, proof will be in the pudding, but ultimately, hopefully make that much more successful.
Similarly, some companies have been coming off the main markets, and they still want to, obviously, you know, let's again, don't forget about the underlying investors, you know, when you provide a solution for them.
And in order to either hold or trade stock from the regular share dealing account.
You know, I think, again, that's where we are, we're in that service space.
But we are excited. Our book of clients now also the ones that have been on board.
Various different stages are really exciting companies on the up, you know, they'll join us and might stay with us for two or three years.
While we're working on other areas that could be you know, obviously planning for the IPO or working with a nomad or whatever else.
And just making sure that timing is right. When is the best time to IPO? You know, the market changes, as you well know, ups and downs, right now has been a very difficult environment, as we all know, in the UK.
So we can hold companies back, you know, on that progressive stage, sit with us wait for the timing, again, with my market maker hat on, you know, get the timing right, and you'll pop onto the market.
Everybody will get involved, the market makers drive liquidity in and hopefully the price are just what our clients want investors want.
Peter Higgins 40:36
Absolutely. I'm going to talk to some of the companies that are just ask this question and want to get this question in mind.
Because it seems to me that there's a massive, massive market that's on the US there. And you've got the behemoth hedge fund, Tiger Global is currently seeking options to liquidate $40 billion worth of portfolio in private companies to tap into secondary market, your company was salivating.
Here's that exit strategies are needed for these large behemoths to get into other markets and you want to be able to match some of that you must be going come on what are your thoughts?
Mike McCudden 41:12
Well, I think you know, the Tiger just one but you know, I think there any number of funds, family offices to ESG funds and everything else around there, okay to get smaller pots, but your I think with our solution is driving our liquidity for these funds as well.
So they want to pair, call it take some money off the table of company X, you know, they want to reinvest in another opportunity, they can bring that business to us, we can provide that liquidity point for them in the right cordial manner and allow them to perhaps take some money off the table and invest in other opportunities.
So it's all about making sure that money flow is there to help support these underlying young growth businesses, which we can't forget are the backbone of our economy, whether you like it or not, you know, providing jobs creating ideas want to support that network.
Take a bit of the risk off the table for the budding entrepreneurs that are growing businesses, making sure there's finance available for them.
And through the likes of us, we can do a bit for the economy. There is a reason why you know companies have been going to the US to list, finance in the US because of get vastly bigger, let's call it ecosystem around and support for growing businesses.
So people see it as a risk off approach. When they see a company go into the States because you'll be underpinned by a much more liquid investor environment for them to support them through the various trials and tribulations of growing a business.
Peter Higgins 43:05
Yeah, thank you for that reply. Now, I want to touch on some of the current companies and also the fact that one of the most recent de-listings iEnergizer, has been admitted to your share matching platform.
You've got the likes of MJ Hudson, Goodbody Health, Millwall Holdings, Rangers International Football Club, which I'm sure some of your team will probably… Yeah saw you smile straight away there previously you’ve had Arsenal, Liverpool, Man City, all on the JP Jenkins platform. So lots of established companies.
Mike McCudden 43:37
Yeah, some of them were certainly legacy, some of them aren’t trading anymore.
But we've got some got some great businesses that are coming on. Again, iEnergizer but we’re working with a huge portfolio around you know, 50 or 60 businesses right now that are at different phases of engagement with our firm, there’s certainly the average kind of market size of businesses has increased significantly over the last, even the last six months.
There's some big ticket, let's call them cornerstone companies coming our way, which, obviously, we're really excited about.
So we're all about quality, showing our clients, obviously, the service they need.
Regardless, we're fairly sector agnostic, but we are wearing in other elements to drive transparency like, you know, ESG reporting, impact reporting, various other factors which will influence an investor's view of the business.
So over time, we will try our best to obviously make it much more palatable, transparent, more information on these businesses that will ultimately drive more liquidity, investment on file everything around them.
So yeah, I think the third book of business, you know, we couldn't be happier with some of the companies that have just joined us. We'll see where they go.
Peter Higgins 45:19
Thank you for that. Now, there's an important point that I need you to reiterate for the retail investors that haven't used your platform before. With regards to the fact that you were previous market maker, but JP Jenkins and InfinitX don't actually make a market. Yeah, you purely match at a price. Can you explain that for our retail investors?
Mike McCudden 45:44
Yes. You have market makers, obviously to drive liquidity stabilize the price and everything else.
That's all public markets. We don't have that necessarily in the private space.
Certainly not market maker, but we can use technology to help support and stabilize as well.
So optics around for an investor's perspective, they come to us, they'll see the companies that are available on a platform, but it still runs like they would be buying shares on a public market.
So we have to sit in the middle we have okay, let's call them gatekeepers, gatekeepers are brokers, they would need to reach out to their broker, they would need to be assessed or find a broker they would need to be assessed for suitability and everything else and at that point via the broker, they can then access our venues.
So we’re not a market from a regulatory exchange, where they might bargain facility or to use another term, they were a bulletin board as well.
So, but these companies need to be onboarded.
We need to as I alluded to earlier, we need to make sure that obviously everything's fit and proper about providing and having the approvals in place.
There are funds say that it's specifically in US and other places that will do unauthorized share trading, whereas we work directly with the business.
Everything's authorized. Everything's approved. And then they have buyers or sellers to agree which meets so there is a kind of there is a reference price and that price, there's a trading history, they will post a limit order will I want to buy X shares a certain price. And you know, if we find a buyer or a seller rather to match their bid, then off they go with changes hands, runs through the credit system, cash and stock changes hands. That is how it works.
But because of that layer, it means it's only for investors that you know, deemed to really know what they're doing in the space that will change over time. But right now, it's onboarding, suitability doing it right, willing buyer, willing seller and somebody can sell obviously, somebody can then hold the stock.
Peter Higgins 48:14
Brilliant. Thank you for expanding on that Mike. I really appreciate it now.
I want to just have a little break, I’m conscious I’ve had you on for a little while but I must speak about your own investing strategy Mike, where do you invest your money? Do you have your own ISA, your own pension? You've been doing this for ages mate, decades. So you must have something going on there?
Mike McCudden 48:36
Yeah I am. You know, I've dabbled in fairly short-term trading as you can imagine being in the leverage spread CFD space, everything else, market making.
You know you can be a rockstar when you're when you're trading other people's money but when it comes to your own and have a few disasters of my own.
Yeah, I'm more you're kind of patient capital, you know decent yields. Only invest in what I understand. I'm pretty patient.
But you know, I can certainly when I speak to my friends and other people who invest, we couldn't be more different. They expect me to be the super short-term micro FX trader, but no, no, I'm very, I don't have time for that. Because I'm a busy man. You know, I've got small portfolio of mixed with there's some private and public.
Yeah, I'm pretty happy with it, to be honest, nice spread of risk. Do your homework stayed with the trends, not with your friends, as they always say, and stick with it, do analysis, research and make it interesting, you know, like, that's investing back to investing in what you know, invest in stuff you're passionate about, you know, it is you're interested in, that could be AI that could be environmental, you know, could be anything really sort of, I mean, whatever floats your boat from an investment perspective, do your homework, and be careful. Don't put all your eggs in one basket is key to all this.
Peter Higgins 41:01
I love the that you’ve touched on the fact on the importance of doing your own research as well, Mike, thank you for saying that.
Because so many people will just FOMO and just chase whatever's going on. Whatever is on trend almost.
Mike McCudden 50:33
No we were talking about we had an executive meeting this morning, and everybody was talking about AI for an hour, we didn't really get much work done.
Peter Higgins 50:48
It's a massive topic, but I did have it on in my questions here.
But I figured I'd run out of time. I've got another question after this.
And it was this was going to be my question to you. As a CEO who does a lot of navigating of the tech space, fintech space.
The relationship with AI and its efficiencies and cost saving benefits are great. How do you, you know, marry that with the potential societal risks and the impacts regarding jobs and other things going on? It's one of those ying and yang sort of discussions, isn't it?
Mike McCudden 51:19
Yeah, I know. It's sort of topical. You know, we're actually laughing about it this morning, okay, nobody's talking about NFTs and Web Three right now is that so last week story.
It's all about AI and how it's going to change the world and take your job and everything else. I think we've all predicted.. was it Keynes back in the 30s that predicted the 14 hour working week, it's not exactly materialized.
But certainly look, AI is going to be revolutionary, but still make no bones around it.
And it's certainly going to drive a lot of factors in this space in our space, and finance, investing quicker than you know it.
And you know, we just have to be keep an eye, we're not an AI company.
But you know, we obviously we work with others and build in that space, clients are coming on and that space is a real game changer.
Hopefully, more positives and negatives come out of it. You know, hopefully we can rebalance some of the ills around the world, especially the wealth gap and everything else, wanting to create jobs, create value, yes, make things more efficient, but you know, less efficiently, get the positive into it and not drive it towards selling stuff we don't need to buy.
Peter Higgins 52:44
Absolutely. Mike, I've got one final question for you.
I'm conscious of it on for nearly an hour now.
You've been exposed to and experienced the financial markets from several different angles over the past few decades.
What are the recurring prudent pieces of investment knowledge you would like to share to our global audience of ultra-high net worth individuals, CEOs, institutions, IFAs, journalists, analysts and retail investors, couple of pieces of absolute nuggets to go you've got to think about these sorts of things, individuals.
Mike McCudden 53:19
Well, I think what from the audience you mentioned before, we may know better than me, but you know, I think I need to be on point be nimble, and be ready to move when you have to move, you're not going to get it right every time.
So when people talk about you got to know when to go, you got to know when to take profit, which can be hard, and you got to know when to cut a loss.
So these are the key things and I learned that way early on, even back in my market making days, because you can be still in a loss, believing it's going to turn round.
And you're like caught like a rabbit in a headlight.
So you've got to be you got to be quite resolute in your decision making.
And when you enter a position or a trade or an investment, you got to have your parameters, you know, I'm aiming for five-10%.
And if it goes wrong by two or three, you’re getting out, you got to be ruthless.
And that's, that's what's worked for me, don't go chasing profits and equally don't go chasing the losses and a balance for portfolio, equity debt, long-term, short-term.
It's all there and look because of services like yours, there's so much information out there, that stick to your net and stick to what you know, stick to what you're interested in and cut your losses. Take a profit at the right time, that's the key to this.
Peter Higgins 54:51
Thank you ever so much, that’s pearls of wisdom there from Mike McCudden. Thank you ever so much, Mike. Mike McCudden of InfinitiX and JP Jenkins.
Mike McCudden 55:02
Thank you really nice to meet you Pete. Absolute pleasure. Anytime.
Peter Higgins 55:10
Thank you very much and I will hopefully get the opportunity to speak to you soon Mike, take care and god bless you.
Mike McCudden 55:16
You too mate, thank you, have a good one, thanks.
LSE 55:19
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