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growth will come from , by servicing existing clients , by providing more services to existing clients . We look to gain a very small number of high calibre prestigious clients every year . This is all we try and do . So , we focus all our attention on that small book of clients . When you start catering to clients who number in the thousands , you always have this 90 / 10 rule where you ’ ve got 10 % of your clients making 90 % of your revenue . Fortunately , we don ’ t have any of these problems . We grow sustainably by increasing our client book very slowly year on year , but our revenue grows much faster . This is because of these disruptive services we produce .
GC : Is your existing client base for investor services the first target segment for the new business , or is it a way of expanding your reach ? John Sergides : What Joe is saying , and what we are doing is building an ecosystem for our clients holistically . Services that typically you must go to three , four or five institutions to get , such as securities lending , financing , execution , hedging , banking , escrow , you should be able to get from a single institution . To us it ’ s disintermediating , what typically was part of different food chains . We have to disrupt what ’ s going on . We have to provide more value . Across the industry , there ’ s fee compression everywhere . Clients want more by paying the same or less . This is not a new theme , but you have to stay ahead of that curve . A good example is capital introduction . You should be able to receive these services without committing all your balance sheet to a single prime broker . You should be able to receive high quality services from providers that are not your typical prime brokers . The client base has grown massively , especially in the various areas of private capital . It ’ s a much bigger industry than perhaps people have realised . The definitions of what includes hedge are very loose at the best of times . When you look at a classic sales strategy , you break it down to four quadrants covering existing products and clients and new products and clients . I sell what I have to existing clients , more of the same thing , always the case . Then it ’ s new products for existing clients , then it ’ s existing products to new clients which is harder . The hardest yet is brand new products to brand new clients . We have a much smaller client set than perhaps the rest of the street and that ’ s intentional . We choose clients very carefully . We ’ ve been growing very fast – not the fastest , but certainly the importance of retention rate is often overlooked by industry peers experiencing rapid growth . If you can maintain your clients – and we haven ’ t lost a client in years – this is where your
GC : In terms of new products and services to existing clients , other than consolidating their source to a one stop shop , are there any areas your clients are grappling with more than other areas , where they could benefit from business consulting ? JS : A hundred percent . What do asset managers do ? What do pension funds do ? What do sovereign wealth funds do ? What do alternative investment vehicles do ? They gather assets , they deploy capital , and they generate returns . This is what they do , and this is their secret sauce . This is all it is . Anything which sits within an organisation , which does not add competitive edge , which only increases liability and risk , is not a good thing to have . Through the pandemic , organisations woke up very quickly to this . The question is , how do I take these functions out of my daily responsibilities . It ’ s relatively easy to do it if you ’ re a five-person shop , but if you are a global asset manager , how do you do this ? How do you suddenly take a hundred operational people you have in house , reduce your real estate cost , reduce your IT overheads , reduce your IT debt , at the same time , allowing yourself to focus more on gathering assets , structuring the right vehicles as quickly as you possibly can to take advantage of market situations with little additional overhead ?
This is part of what our consulting team is out there for . JL : In essence , what we do is to help our clients succeed . Our clients ’ goal is to generate alpha . Our goal is to help them not worry about the things that they don ’ t have to worry about . That ’ s going to lead to a very happy client and it ’ s also going to lead to a very successful relationship .
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