London-based Marex, one of the world's largest privately-owned commodities brokers, on Thursday reported a 53% jump in adjusted pre-tax operating profit in 2022 to $121.7 million on net revenue up 29% to $701.5 million. In August last year, Marex agreed to buy ED&F Man Capital Markets to boost its metals business and expand in fixed income and equities. A source close to the situation said at the time the deal was worth $220 million. Marex withdrew an initial public offering (IPO) in 2021 due to difficult market conditions. "Were we come to market and look to IPO, what investors would see is a very different firm to the one they saw a couple of years ago," Marex Chief Executive Ian Lowitt told Reuters.
"Private equity does look to exit and the firm has been transformed so that means when markets reopen that will be an obvious thing for our owners to consider."
Marex is majority-owned by private equity firm JRJ Group and its partners, Trilantic Europe and BXR Group, which bought stakes in the broker in 2010. The ED&F Man takeover expanded Marex in Dubai and the United States. The U.S. business will soon equal the size of the European business, which has dominated the company.
"We see real opportunities in the Middle East and we now have a reasonably substantial Dubai presence," Lowitt said in an interview. Marex's clearing business was the strongest area of the 2022 results, where profits soared 155%, helped by stronger client activity and rising global interest rates, which lifted income on client balances. Client funds soared by 139% to $12.9 billion, with $4.5 billion added through the takeover. "When a client clears through you, that's extremely consistent revenue. It's quite difficult for people to move their clearing," Lowitt said. (Reporting by Eric Onstad. Editing by Jane Merriman)
