Samir Patel, Global Head of Global Market Sales, Nomura Securities

[00:00:01] Hello, this is Dean Curnutt and welcome to the Alpha Exchange, where we explore topics in financial markets associated with managing risk, generating return, and the deployment of capital in the alternative investment industry.

[00:00:19] It was a pleasure to host a discussion with Samir Patel, Global Head of Global Market Sales at Nomura Securities International, on readership, client strategy, and the evolution of institutional markets businesses in an environment defined by constant change. The conversation emphasizes how institutional client relationships have evolved over time.

[00:00:41] Samir explains why clients increasingly seek counterparties with differentiated strengths rather than broad-based coverage across every product area. He discusses how Nomura has focused on areas where the firm can leverage structural advantages, including solutions-oriented financing and strategies tied to concentrated equity positions. We also explore the growing importance of alignment across sales, trading, structuring, legal, compliance, and risk management.

[00:01:10] Samir outlines how cross-functional coordination and global product integration are critical as markets and client needs grow more interconnected. The discussion also covers recruiting, mentorship, and talent development. Here, Samir reflects on the apprenticeship culture within markets businesses and the importance of curiosity, adaptability, and long-term passion for financial markets in developing younger professionals. A major theme throughout the episode is technology and AI.

[00:01:40] Samir discusses how automation and AI-driven tools are increasingly being applied across onboarding, structured products, workflow management, and client analytics, while also reshaping how firms think about productivity and scalability. We close with thoughts on market structure, robo-connectivity, competitive dynamics, and the importance of maintaining flexibility in a rapidly evolving financial ecosystem.

[00:02:06] I hope you enjoy this episode of the Alpha Exchange, my conversation with Samir Patel. My guest today on the Alpha Exchange is Samir Patel. He is a senior managing director and global head of market sales at Nomura Securities International, and someone I've had the pleasure of knowing for more than 25 years now. Samir, it's great to have you on the podcast. We've been talking about this for a long time. I really appreciate you having me on the podcast. This is going to be a lot of fun.

[00:02:34] We worked together back at Lehman Brothers in 1998, I think was the start, and we worked together at Bank of America. Why don't you run us through a little bit of your career history in terms of joining Nemora in 2009 and your leadership role now? So brief career history. As you mentioned, I joined Lehman Brothers in 1998 with you on the Structured Solutions desk at Lehman Brothers. Was there until 2000 until a few of us got the dot-com bug.

[00:03:02] Did the structured duratives online at an internet startup, which was super exciting, great experience. But when the bubble burst, obviously that was a challenging time. I did what any responsible 24-year-old would do, which is travel the world for six months and see 40 countries. And then I joined you at Bank of America. A different role, same underlying product, equity derivatives, but more on the flow-based side, covering hedge funds, etc. Really loved it. Enjoyed it. It was a great team, great experience. It was a phenomenal opportunity. And so was there until the Merrill merger.

[00:03:31] And at that point, kind of the equities business largely went to the Merrill team. As we're looking at different opportunities, this is in the depths of the financial crisis. I thought the biggest value we brought was the team itself and how well we worked together. So at the time, Nomura just bought Lehman's Europe and Asian operations. So a team of 10 of us came to kind of build the business largely from scratch. You know, at the time they had no technology, no supervision, compliance, and legal. So really had to build the business from scratch. But it's been very interesting, but amazing 17 years here.

[00:03:59] And it's been quite rewarding through the ups and downs. It's just unbelievable that it's been 17 years. As you said, you really joined with a team from B of A and there wasn't much there. And now there is a lot there in terms of the products that you guys deliver, the clients that you cover. What I wanted to do throughout this conversation was not what we usually do on this podcast,

[00:04:23] which is talk about market prices and monetary policy and inflation and those types of areas of exploration, but really to think about the business. I thought it would be excellent to really solicit your thoughts on your leadership role at Nomura and really have a conversation around four segments. Start with clients. Talk about people, both recruiting and also retention. Talk about the products that you deliver.

[00:04:54] And then an area that I've always just thought a lot about is alignment. Getting sales, trading, structuring, compliance partners, and so forth on the same page, ultimately to try to cover clients better. And we'll do all this with change in mind, because if there's one thing we can count on in this business especially, it's change. So let me throw it back to you. You talked about the listed business, which you started with.

[00:05:22] It's now much more than a listed business. And I'd love to just get a sense as to what the product set at Nomura looks like institutionally across both equities and fixed income. We're fairly broad-based across most of the product segments. So we have strengths across our macro businesses and rates and effects. We have a large securitized product business. Credit. We have several strengths, particularly in Asia and growing in Europe as well.

[00:05:48] And then equity side, we have InstNet, which is our execution arm in conjunction with what we now call global execution services, which are Japan cash effort, a large derivatives business globally, and structured solutions business across financing and derivatives, as well as convertibles and prime finance. So when you look at kind of our global market subset of products, it's largely similar to the biggest competitors in the space with the exception of commodities where we're much more targeted in precious metals at the moment.

[00:06:16] And one of the things you said before we jumped on is really trying to find where you have some competitive advantage. You can't be everything to everybody. Help us understand. Of course, Nomura is a Japanese firm at its roots. You spent a lot of time on the road traveling and in the air. Give us a sense as to the areas of comparative advantage that you saw early on and then sought

[00:06:43] to develop in terms of building those out and connecting those resources to clients. Clients increasingly look at this way. They're not looking for dealers to be their counterparty across everything and be their number one stop. They want to know what is your competitive edge. And for Nomura, we're not a money center bank. So we don't have large deposits, our cost of funding. We don't have the scale of balance sheet and the cheap cost of funding that some of our competitors do. So there were certain things that we could create that we always looked at as a strategy. What are our strengths?

[00:07:12] And it could be Japan. It could be talent. It could be this is just too operationally burdensome for some of the other bigger, larger institutions. And within that, we created these are areas that we're going to invest in focus. And it's been iterative over time, you know, and those opportunities will expand or decrease over time. A good example is in the equity space. One of the businesses that we've really been able to differentiate is what we call the accumulation business. And that's when a client wants to buy a large concentrated stake in a public security.

[00:07:41] We built the business from scratch. We built it on the private side of the business. We have systems and infrastructure to keep utmost confidentiality. So we were able to build this business over the last 15 years. And it first started with activist clients that wanted to build large concentrated stakes. But using the technology, the confidentiality and the products that we built, we now have corporate clients. We have sponsor clients, other hedge funds and asset managers that are regularly using this type of business. But again, it's something that Nemora has been able to kind of establish ourselves as one

[00:08:11] of the key players and probably by far the leading provider in these types of services. So that's just one example. But we've been able to differentiate what we can do as a firm based on some of those advantages we outlined. So run with that a little bit more and maybe take us back to the early days of how this business got off the ground. It typically, I'm guessing, is going to start perhaps with a salesperson that has an inquiry of some kind.

[00:08:35] But I'm also guessing that it's really from there, you've got to mobilize a number of different contributors to getting the product off the ground. You referenced the regulatory side, the legal side. Are these Delta One products or are these option products or both? Can be. It's frequently Delta One, but there's also times certain clients will use option structures for it. But it's a great question. You know, it started with actually a salesperson on our Flow Doritos desk. Never done these products before.

[00:09:03] We didn't have the skill set for it, nor do we want that business done off that desk because there's too much visibility on it. But when we took the inquiry into our desk, we took it to the right team, a private side solutions team, and then we marshaled up our corporate partners who are, frankly, great partners for our business. So we had legal reviews, tax and accounting, compliance, risk reviews, both counterparty and market risk, the financial kind of reporting on the back end of that. So it was a pretty start to finish kind of evaluation of it. We have a new product committee, something that we kind of outline anytime we venture

[00:09:33] in a new business line. We kind of do a new product approval first, establish the parameters for those businesses, and then look to launch that. And so we did this for this business 15 years ago. And again, it started from a client and salesperson not off a desk, then a separate desk ran with the whole initiative from there. And so it's a way that Nomura generates a process and governance for any new product that we look to create. And there's a lot of folks involved. You just named a number of different business partners in bringing something like this together.

[00:10:01] And this is skipping ahead a little bit, but it's just such a good example of the need to establish alignment where you're incentivizing folks that are cross product, cross function to all work towards the same end goal, which is, of course, servicing the client. I'd love for you to just take us inside that a little bit because steering the process gets complicated the more business functions that are involved.

[00:10:30] And we've come a long way over this the last five years, but the alignment with our corporate functions is critical to supporting a business. And over the last five years, we've actually had representative of all our corporate functions participate in our global management meetings. You know, I think it's important for them to have an understanding of which way and the direction the business wants ahead and from the business to understand, you will hear the various considerations we have for our corporate functions into our business. And so that dialogue and relationship, obviously, there's lines of control and defense.

[00:10:58] So our risk departments obviously will be skewed towards the risk elements, et cetera. Same thing from a core compliance and legal perspective. And it's a very healthy dialogue and obviously will be challenged at times. And I think that's a very healthy thing for the long-term viability of a business. But I do think there's a very constructive dialogue between these teams. I think there's a lot of not just professional, but also personal respect between the teams. And I think that's an important part of how we can ultimately serve as clients and get business done while maintaining proper risk and governance over it.

[00:11:28] And maybe zooming out a little bit, but staying with the same theme, your role is global head of global market sales. And so that is a functional title. That's a sales leadership role. And then, of course, there's product segments as well. So I'm dating myself a little bit, but there's always a little bit of tension there between the product side and then the coming across on the sales side.

[00:11:54] And I'm just curious if you can give us a little bit on how you think about your different product silos, whether it's rates or equity derivatives. You mentioned credit as well versus the sales leadership role. How do you bring those together ultimately to create the leverage that allows you to deliver more to the client? This really changed five years ago when we changed some of our management structure.

[00:12:22] Historically, it always been run as a regional business. So it was Americas, Europe, Asia, Japan, and Japan. And that was how the business was managed. And then five years ago, we changed that structure. So it was more along global product alignment. So we named global product heads for equities, rates, FX, et cetera. And then within that, I was named global head of sales and we named global sales head. There'll be heads of trading and heads of sales and head of markets in each of those regions that will have a very heavy say in much of the businesses. And then there's all the large parts of the region.

[00:12:52] So like the Europe country continental teams or the Asia country teams, they'll be run from a regional basis as well. But we very much have the mantra of respect the matrix. It is very much a view where the product will have input, the regional have input equally important. And I would say one thing we're really proud about the culture of Nomura is very cohesive. It works extremely well together. So there's very little conflict between that. And from a sales perspective, I kind of make a joke prior to the five years ago, there was very little dialogue amongst,

[00:13:19] I would say my counterparts at the time I was equities head in like the fixed income heads in the other regions. And now there's regular dialogue, regular meetings, regular forums where we discuss all topics, whether it could be anything from technology to clients to onboarding issues, whatever. But there's regular dialogue between the sales functions. And cross-selling has been a big buzzword for us. So we take street data in terms of what are the wallet opportunities, where are we increasing and decreasing, or where do we have a really strong relationship in certain products?

[00:13:47] We see they have a big wallet in another region or another product. Can you help make introductions and facilitate introductions? And so we've done a much better job of operating as a global sales franchise. And importantly for our clients, we're servicing them as a global client. So they understand that if they're relevant for us in one region or another, we have that holistic view of them from a Nomura perspective. And we've invested quite significantly in our SRM function, senior relationship management.

[00:14:12] So for our biggest clients, we have that one-stop service that can internally understand kind of the different issues or opportunities, and then interface with our biggest clients who oftentimes have the same function on their end to find where respective organizations work better together. We mentioned a little bit of your travel, which can get pretty hectic at times. You're doing that to meet your colleagues in other offices and other regions. But I'm also positive you're meeting clients along the way.

[00:14:41] I'd love to learn a little bit more about the manner in which your client interactions can be kind of a funnel for product development. We talked a little bit about this with regard to the first set of activist trades that you did. In what ways are you using the interactions you have with clients to learn about the changing needs, where their appetite is to take different risks? Talk to us a little bit about your client interaction.

[00:15:09] The streets definitely evolved, I would say, over the last 10, 15 years. And clients are great partners. They realize, like I mentioned before, they don't need their counterparties to be awesome at everything. They really want to be good partners. They want to have an understanding of what resources they're using from the firm. And are you getting a reciprocal amount of wallet share based on the resources they're getting from you? And one thing clients repeatedly tell us is they want us to be clear about what we're good at. Where do we think they should be engaging with our firm?

[00:15:36] Where do they think they're missing differentiated products or liquidity or ideas? And so that's what we spend a lot of time on. So in these meetings, they'll come to us and say, where do you think we are missing opportunities with Nomura? My questions tend to be, what's important to you? How do you evaluate your kind of parties? What's important for you? Where you allocate your mind share, your wallet share? What can Nomura do better? Are there things that you're missing as a firm or organization that would be helpful to you in your investment or trading process, etc.?

[00:16:03] But I would say it's a much more dialogue and clients are very interested in making it a mutually beneficial relationship. We've done a better job and we always try to connect our strengths with client needs. And that's where clients really care to hear at this point. And as you ask them about where you can focus to potentially deliver more, what is some of the feedback that you've gotten? And how did you turn that around into actually pursuing change or growth with a product set internally?

[00:16:31] Some of this will be structural or things that will be, let's say, outside of our control or very difficult to change. And that's just fine to be honest. For you to move up in market share, for you to be accessed to the product, you need to do X, Y, and Z. And that may or may not be within a mandate or something we can deliver on. And we tend to be very honest with that. And then there's other things that we can control, whether it could be ideas, more research, better liquidity or better fits here and there. And that's what we really try to focus on is where can we deliver the products and capabilities where Nomura has strengths. And a lot of it can be on solutions.

[00:16:59] A lot of it can be on alpha and idea generation and then ultimate liquidity. And we really want to focus on, again, what's a fit for Nomura to fitting the client needs and making sure that's where we're connecting and not leaving those areas uncovered. So as you were talking about interacting with clients, you used the word partnership. And where I wanted to have you just talk a little bit more about was measuring. How do you measure the quality of interaction with a client?

[00:17:27] What are the ways in which you try to bring the attribution across the entire platform of a client to Nomura? Great question. And that's something we're spending a lot of time and energy and resources for. I would say there's two primary initiatives we have now. One is measuring in our flow business in particular, client profitability. And it helps measure just the client profitability from day one to maturity.

[00:17:51] And over time, as we get lots more and more reps and data points, what are the clients that we should allocate more and more resources and balance sheet to? These client, what we call Model P&L, are tools and resources that will apply to more and more product lines. So obviously, revenue is easy for us to measure in terms of the revenue they're generating for Nomura. But in the context of that, what is the resource we're providing to the client? That could be obviously the capital and the Model P&L be one, but also could be research resources.

[00:18:19] It could be the counterparty risk RWA we're extending to it. It could be the amount of salespeople that we have allocated to it. It could be the number of clients that are onboarding and the operational support we have on it. But for us, it's how do we get a measure of balance sheets? Obviously, another one in terms of the financing that we're providing. Just taking out a holistic view of clients in terms of here's everything that Nomura is providing. Here's the revenues and where we're connecting in return. And this is a good balance of trade for both parties.

[00:18:43] I think having that data set will help make informed discussions when we're talking to clients at the top of the house level. Because Nomura is such an international business, I wanted to explore just a little bit of how different the interaction might be with clients that are more Japan native situated there or utilizing maybe structured products out of Japan and Asia versus more the blocking and tackling model that is the U.S. listed derivatives market.

[00:19:13] How do you guys think about the difference across geographies and also just the manner in which these products can be so different? In this transformation, I'd say five years ago when our new leadership took place, the dialogue with our partners in Japan has improved meaningfully. And just the coordination across all the product lines, they're truly part of all our global product lines meetings, our global sales meetings. And there's an active dialogue and I would say discussion around client and opportunities. Now, with our Japan-based clients, language could obviously be an issue.

[00:19:43] The primary touchpoint will primarily be the teams of Japan and they'll cross sell with our global teams. And vice versa, we have a lot more international clients looking to trade in Japan. Those markets are very interesting. The equity markets are at all-time highs. There's been a lot of, I'd say, government reform and support to kind of improve shareholder returns. So we've seen a lot of international clients allocating more capital there. And obviously in the fixed income markets with the move in rates and yields, it's a very interesting market for international and macro investors. So it's been a very good time to be tomorrow.

[00:20:12] Our clients are more actively looking for insight, color, liquidity into the Japan markets, which obviously, given our home market strengths there, lends itself very well to leveraging our home expertise with our client base. So I think from a flow perspective, it's gotten a lot more interactive in looking at these global clients. It could be balances in terms of financing businesses or trading and execution. And on the structured product side, there's a lot of unique clients and liquidity that we can access in Japan that we can then support global businesses.

[00:20:40] And there's also different types of risks or structured products that we can distribute into our extensive kind of Japan distribution. It's a super interesting backdrop with Japan because I'll go back to August 5th of 2024. You had this giant move in the Japanese yen and it set off this cascading impact in rates there, but also the VIX just went haywire for a period of five hours or so.

[00:21:10] It got to the 50s. And so those cross linkages from all the way on another part of the world are pretty strong. And you've got to pay a lot of attention to things that you probably didn't think you had to. And so I'm curious just on the interaction between the teams even there, between like a rates team there and an equity vol team there. That seems to be an important point of connectivity as well. For sure.

[00:21:37] For us, we have regular regional meetings where cross product, where we talk about markets, environments, risks, client flows, et cetera. Then we have global trading and risk decisions. But within that, we have our sales leadership participate. We have our strategists participating. But markets are increasingly interlinked. And movements and exposures or risks in certain product segments very easily and very quickly do manifest itself across product lines and geographies. And I think it's a necessity. Our clients do it. I think all the street does it.

[00:22:06] But we need to be talking across regions and within regions and across product lines to obviously be discussing these and the impacts across markets. I think it was two years ago I had Tony Morris on the pod. And we had a great discussion. So he's your global head of QIS research. A ton going on in that area. Bring us up to speed on what Nomura is doing in this world of QIS.

[00:22:32] Nomura's strengths historically had been largely in the fixed income space and largely centered around Europe in particular. Over the past three years, we've diversified quite significantly into equity products and strategies. We've hired a team in the U.S. We've hired distribution teams in Japan, which is a pretty significant part of the market. Given our strengths of our relationships there, that's actually gone very well. So it's been a growth engine for us. Again, it's the product that takes a lot of lead time. It's a product development.

[00:23:00] It's ability to customize customer inquiries and reacting to where their demands and opportunities are. So it's something that we are scaling into. We've had very good success and traction on that and something we continue to want to build and diversify further. What other product segments, if you were just to look back the last, I don't know, five years? I mean, if we go back five years, it's 2021, the 10 years yielding 80 basis points.

[00:23:23] So we go through these cycles of rates of high vol, low vol, and the product appetite tends to change along the way. And innovation is a force that just never stops moving forward. If you look back on the products that exist now that you guys are focused on versus five years ago, what's really different today versus then? Our management team that took over, they highlighted the need to invest in sales in our client franchise.

[00:23:51] When they looked at the number of salespeople Nomura had at the time versus competitors, we were lighter than a lot of our competitors. And so we've invested quite significantly in sales. I would say five years ago, we were probably overweight the macro and flow businesses. So EquiDurutas, FX and rates, and probably overweight our hedge fund client base. And those are all great businesses, great clients. But what we've invested in significant is diversifying across from that.

[00:24:16] So we've invested significant salespeople to cover client segments like insurance companies, sponsors, corporates, asset managers. Included in that is our SRM teams that we've hired quite a few people to have that senior level, top of the house relationships. And then we made significant investment in our solutions businesses. So anything that's more bespoke, either financing, derivatives focused, with anything with a structuring or solutions bent to it, we've invested heavily in that on a global basis as well.

[00:24:44] So you mentioned investing in sales. And so this is where I wanted the term, which is talent, recruiting. We were lucky enough to find you out of Duke University in 1998. I can imagine the war for talent, both coming straight out of college is as fierce as ever, but also lateral hires, very competitive process as well.

[00:25:09] I'd love just to learn a little bit about almost your philosophy around recruiting, the things that you're looking for, you and your team are looking for. Let's just start with folks at the early part of their career that don't really have any experience. So you're sort of hiring an athlete with potential more than anything else. What are the attributes you're looking for? And how might that be different than what you would have looked for a decade ago? The three things I look for are aptitude, effort and attitude.

[00:25:38] And the new one I would add, I'd say is passion. And I'll come back to that in terms of kind of what's different now than perhaps 10, 15 years ago. On the aptitude side, I think everyone I see these days is super qualified. I don't think I could get a job these days anymore. The bar has been raised so high. So that really comes down to effort and attitude. Effort comes down to are they willing to put in the hours? Are they willing to put in the time to learn and really differentiate themselves and pick up the business? And it comes down to attitude. Are they a team player?

[00:26:04] Are they going to be able to go above and beyond the service clients or to manage risks or to ask what do they need to do to be successful in this business? So those are two things I really look for. But the biggest one that I would say I've been really focused on even more and more right now is passion. And the reason I say that is, and I don't think this is no more specific. I think this is street specific. We're seeing much higher attrition rates of, let's say, analysts and associates three, four, five years out of the business. And they're not leaving for competitors. They're actually leaving the industry.

[00:26:32] They could be going into different industries or whatever. But Wall Street is a great place to learn. It's a great training ground. And I think more and more people are either deciding it's not for them or are going towards doing different things in the industry. And so what I look for increasingly is just passion. Are these students genuinely interested in the financial markets? Do they show it through either the clubs, either personal investing? But is this something that we think this candidate or individual is going to want to do, not just for the next two to four years, but the next five to 30 years?

[00:27:00] That's increasingly that level of interest in finance is something I definitely look a lot more towards in terms of talent. One other little random tidbit I would say is when I'm looking at resumes or candidates, my oldest son just went through the college recruiting process. And one thing I got a tremendous appreciation for is anyone with a military background. We toured a couple of military schools. Tremendous and so impressive in so many ways. And so it's a little bit sometimes more difficult for them because they're now applying when they're 24, 25, 26, whatever the age may be.

[00:27:30] But I really hope they continue to look for a field in finance. I find them to be tremendously impressive and the ability to balance in that discipline and everything else I think would lend itself incredibly well to the financial industry. So if any of those resumes hit my plate, I'm always very interested. And then I'd say probably something I didn't appreciate as much, athletes.

[00:27:47] So people that can manage a academic course load while 20 to 30 hours a week in terms of practices or training or whatever it might be, that lends itself well to financial markets and industry as well, where you can multitask and actually manage a workload and learn how to balance the different rigors and demands of the job. Well, you mentioned looking at personal investing as a part of maybe passion for the markets or interest in the markets.

[00:28:10] I'm remembering our interview in 1998, and I believe you told me you got long a straddle at the wrong price. When I was applying to Wall Street from college, I was applying to investment banking because that's what everyone was. I thought investment banking was taking people's money, investing it. Like I had no family that had been in financial markets. I didn't have a ton of that. At the time, Duke didn't offer finance or any type of background. It was an econ major with very little practical financial exposure. To me, it was a huge learning experience.

[00:28:39] And I look at how naive and ignorant I was back then. And the people these days, frankly, I think the colleges and frankly, Wall Street's done a much better job of educating, giving exposure to college students. And I think that's super important. When I interviewed college kids now, I was like, don't go into a field just because that's what you think everyone's going into. Go into a field because you're genuinely interested in it. The only way to be good at something is if you like it and you're passionate about it, then you're going to put in the effort to actually be successful at it. But people interested in finance, it's such a wide array of industries and jobs.

[00:29:08] Give them exposure to all of it. See what piques their interest. I would love to let them shadow each one of the jobs. It could be sales. It could be trading. It could be investment banking. It could be private equity, whatever it might be. And see everyone's wired differently. Give them exposure to as many different fields and industries as we can and see what is the best fit for them. And then ultimately what is the best fit for their skill set for the various firms. But that's one thing I like about Nomura's program is that we let our summer interns and our full-time interns rotate across a lot of different functions and desks.

[00:29:38] When I was at Lehman, the same thing, which was a huge benefit. I barely knew the differences between fixed income and equities and came across your desk and you were funny enough. And it was a great product. I was interested in equity markets and had a little bit of math background to me. More importantly, I really clicked with the team. So with the product and the team, that was my number one choice. And it ended up being a great fit for me, not just for them, but for a long-term career because I do find equity is super interesting. And sales more naturally lends itself to my skill set and background.

[00:30:06] You mentioned a lot of these students are coming out of college just wickedly equipped with skills. But they have, of course, no institutional context. It's very difficult to make them useful very quickly. So you've really got to lean into maybe you call it a mentorship culture, apprenticeship culture.

[00:30:25] But there's got to be a buy-in where the folks that are in the seats for five or more years feel that it's part of their role to have these younger folks come in and have a positive experience where they can get up and running as quickly as possible. And I'd love for you to just speak to that in terms of Nomura's buy-in for that, maybe some of the challenges that it takes because everybody has a day job.

[00:30:52] How do you create that momentum where you're recruiting young, smart people? But of course, then they need to be invested in when they first get to the firm. So we spend a lot of time and energy on this. We have a junior talent board. It's a global board in nature within global markets where we have some almost senior people that actually talk about the program. It could be anything from our training to our recruiting to our advancement criteria to our compensation. But we view all aspects of this.

[00:31:19] And I think one thing we do very well is we take a lot of feedback from our analysts, associates, our VPs, EDs and MDs in terms of what do we think we do well? What do we need to add more of? What do you want to see more of? Where do we think Nomura can do better? And then we look at a lot of our data. Are we seeing more attrition in certain levels, certain ranks, certain functions, certain products? We combine all of that into an always evolving system of what can we do better to invest in our junior talent?

[00:31:47] Because that is our lightblood of our talent within the firm is how do we better mentor them, train them and ultimately retain them. So we take a lot of feedback all the way from our first year analysts, all the way up, all the way to MDs of what can we do to improve the program?

[00:32:30] We encourage that constant dialogue and feedback from the analysts themselves. So that solicitation of feedback, tell us if you're stuck, if you're wanting more, invites conversation. You did say that out two to three years folks are just leaving the industry. Square that for us. What's the way of defending against making that investment for two to three years, but then having folks just leave? It is a bigger and bigger issue.

[00:32:57] Part of it is just making sure we try to identify the people that want to be in the industry and want to be in the field. Part of it is measuring what's important for their careers, the development in their jobs. And so we try to address that, whether it's more internal speakers, more skill development, more external exposure, faster development in terms of career paths and sales, trading, whatever it might be.

[00:33:18] So we're having this conversation over a podcasting venue that has the capacity to download every word we say, score it according to the tone of the conversation. There's so much new in the realm of technology. And of course, our markets are dominated by technology, the entire AI trade.

[00:33:39] I'm curious in terms of business development and using AI related tools or AI adjacent tools. Again, these are pretty new tools that we can use. In what ways are you guys using AI to make your business more efficient? No more is a really good job of being front footed on that. I think we're in a fairly strong space in terms of how we've looked to adapt that technology into the global markets business.

[00:34:07] The reality is a lot of our competitors will be able to throw a lot more resources towards it. So we have to maintain kind of being efficient in terms of how we apply it and what use cases we want to use. There'll be simple things like KYC, onboarding, etc., credit reviews that we can use this for.

[00:34:21] On the sales side, we've spent a decent amount of time of technology of how can we leverage various data inputs and how the AI tools can make our sales seems more efficient with both coverage, being on top of client positions, idea generation, and making sure it's relevant for the clients they reach out to. So there's a number of workflows that we've enacted and embedded within the global sales organization.

[00:34:43] And there's different things that we can do to kind of evaluate whether it's street data we get for wallet information or client prospecting, that there's a lot of tools that we can use to kind of leverage that and make that more efficient as we as a sales organization view where we're underperforming or outperforming.

[00:34:59] In what ways, just in terms of the client-facing products, ways in which whether it's a salesperson or a structurer can better interface with clients using some of these tools, what advantage, whether they're efficiencies or ways of capturing and understanding data in presenting ideas to a client? Talk to us a little bit about how some of these new tools can be used in that realm. Yeah, I'll use a couple examples. One could be straight through processing.

[00:35:29] We take structured notes, for example. We have tools that can read inquiries, automatically price it if we get all the pricing back to clients and then do the term sheet. So in terms of automation around some of the, I would say, the more bespoke structured products, but more flow and vanilla in terms of speed and quantity of pricing, we've become much more efficient in using those tools. And then I kind of mentioned the client diagnostic tools. If we can use AI to kind of measure profitability of trades, we won.

[00:35:55] I would love to capture more of the trades that we miss using AI tools or capturing even a wider subset of data in terms of how we're viewing our model P&L. I think we'll just make the business more efficient as well. So there'll be various aspects of trade capture and efficiency and straight through processing where I think AI will be tremendously effective. Where are you on that? Is that early work in progress? Have you already seen some of the benefits of that? We see it in some of it further along than others.

[00:36:22] You know, straight through processing, I think we're pretty far along on that in terms of being able to scrape other inquiries through Bloomberg's and phone calls. That's probably a medium to longer term ambition. So your career is now spanning 28 years, 17 at Nomura, global financial crisis. I think you were there for LTCM as I tried to clean up all those spreadsheets. That was a mess. You've interacted with clients a ton along the way.

[00:36:48] You've been responsible for putting large trades into your trading counterparties books. Some good, some not good. It just happens. On the client coverage side. But you're also just in terms of lessons from the business itself, running these various businesses.

[00:37:09] I'd love for you to just look backward a little bit, whether it's by virtue of example or just thinking through what you've learned along the way that has become a guiding force for you now.

[00:37:51] It's a pretty meaningful impact on business models and opportunities. But financial markets are incredibly dynamic and technology has always been another one. And this AI could be a very large accelerant in terms of how much the business changes over the coming years. But that's first and foremost. And then even within firms, business strategies can change quite a bit. So that's what I love about it. At no point do I ever feel like I'm coming in and doing the same thing day to day because things change so rapidly. And you always have to be ready to accommodate a new issue or a new constraint or a new challenge.

[00:38:21] So some part of what you're doing is really looking for opportunity, hunting for where the portfolio of your businesses should go, where it's optimal. You used the term cyclicality earlier, which I really like. It's just a fact. There are times when a business is rip-roaring and there are times when the opportunity set declines. It could be regulatory. It could be vol gets stuck at a very low level. Risk appetite declines.

[00:38:50] You're always looking for opportunities to potentially take on new businesses, but also optimize where you're expending resources and energy. What does the last year tell you about where you think things might be going in terms of the directionality of the business? What are you excited about? Where are you and your business partners thinking about deploying new resources?

[00:39:16] We're quite excited about some of the market share gains we've had over the last three years. When you look at a total markets revenue or client revenues, a big thank you to the management team that's kind of invested in sales and the client franchise. But we're quite excited about our revenue gains. Last year was an all-time record for us in the global markets business, and we're quite excited about the opportunity ahead of us. We had the benefit of strong financial markets and wallets have been increasing across the street, but we're quite excited about the opportunity ahead.

[00:39:42] In terms of some of the challenges, the competitive landscape has definitely changed quite significantly, in particular when you look at the non-bank liquidity providers. When you see some of the revenue numbers that are being reported in the press for some of the largest players, these are just huge numbers. And you're seeing them expand into more and more products and more and more regions, and I think that will just continue. Already seeing them expand into more OTC businesses, etc.

[00:40:04] So that's a reality of the business, and so that's something that we'll just have to consider in terms of whether competitive dynamics and market dynamics, and we'll have to adjust accordingly.

[00:40:14] Are there regional areas of potential increased investment where you think, whether it's European markets are starting to get more interesting, or is there a specific product that maybe it's early days, but you guys are evaluating where there might be increased client appetite and client demand? We've made significant investments in people, sales, trading, structuring research for the last three to four years, largely filling out some product gaps that we had.

[00:40:43] In FX, we're very large in Asia and Europe, more limited in the US. We've built that out. Europe, we rebuilt our equities business there four or five years ago. So we're building these product strengths to complete the global product lines. Looking forward, I think we're in good shape in terms of most of the hiring. We'll continue to diversify in terms of, as I mentioned before, covering those client types, whether it's the sponsors, asset managers, insurance companies, and additional investments and solutions.

[00:41:09] But for us, will there be more targeted investments at this point, not necessarily a large influx of new talent? So we've talked a little bit about incentivization. And of course, the incentivization structure directly impacts how people behave. Boy, I'm going back a ways here, but in our early days at B of A, there certainly was this sense that sales credits were money. My old saying is you can't eat a sales credit. You've got to actually put the P&L in the bank.

[00:41:36] Finding a way to align sales and trading is very, very critical. It's something you and I have talked about a long time, and I can't imagine it's not been a critical area of focus for you for 17 years. What's the current state of the state in terms of how someone like yourself thinks about getting that alignment synced up? This is super important and critical to get right if you want a properly manageable markets division. But Nemours culture is all about driving bottom line P&L.

[00:42:06] You'll never see a sales desk celebrate a great year's sales credits if the bottom line revenue of the desk was weak. Our trading desk also know that our core GM strategy is to take a client-driven approach to growing revenues and taking shares. So one thing I'm really proud of is every year we do a survey of all the new hires within global sales. And we'll ask what is better than your old firm, what's worse than your old firm. And out of a list of seven or eight things, I think number one, every single year has been the culture between sales, trading, and research.

[00:42:35] That goes a long way to just show that this is something that we take very seriously here and something I think we've done really well. And my boss has said it to me, sales credits only matter if there's sales credibility. Given the pace of how quickly markets change, we constantly review our sales credits, our methodology, and where they over-understated to actual P&L. So we have a regular process where we make adjustments where needed, and both sales and trading sign off on the new methodologies. This makes a big difference.

[00:43:02] So when we go to management and we say a salesperson is an X million-dollar producer, or this client generated X million in revenues, the manager is going to take faith that these values are at least indicative or representative of the actual bottom-line P&L of the business. I think that culture has changed quite dramatically. And we've made quite a few changes in some of our product lines. And salespeople understand this is not meant to make sales less meaningful or less important. It's just that we want to make sure that we're intellectually honest with the true value of the flows that we're bringing.

[00:43:32] It also makes sure that our sales team are spending more time on the products that are driving bottom-line P&L. And from a trader perspective, I think 10, 15 years ago, they probably viewed their most important measure of performance as their risk P&L, which would be their total P&L less their sales credits paid. And that's totally changed. That would naturally create tension between sales and trading, right? They'd incentivize to give less sales credit because it makes them look like a better trader. I think at this point, it just comes down to P&L.

[00:43:59] If you can properly service clients and monetize those flows, that's in many ways more important and a better mix of business than just having a bunch of prop and trading P&L around it. Those model P&L tools I mentioned before will help be a quantitative tool to help be a data overlay around some of these conversations that sales and trading will naturally have over clients and quality of flow. So a couple of follow-up questions. One, intra-desk.

[00:44:24] So whether it's across a REITS desk by maturity bucket, in an equity derivatives desk, you have these different sectors. You have index, sometimes even VIX is separated. At least in my old role of running the B of A desk, it was wanting to tell clients that we were going to be very consistent across the different sectors. And those are different people with different styles and different risk appetites.

[00:44:51] And so that can be challenging where you're trying to convince the client that he or she will get a very even experience across the different sectors, but they're different people taking that risk. How do you balance that where there's just different personalities, different risk appetites, but you want to create a consistency of experience for the client? Clients, I would say, increasingly expect that within a product. So within rates or all elements of equity derivatives or within FX, et cetera.

[00:45:20] Very rarely do we see a client come to us saying, well, we're very important for you equity derivatives. We paid you this much in commission, so I need you to be more aggressive in rates. I think this comes down a little bit of clients really do want to be great partners. And so they tell us if it's a good fit, then we want to engage with you X, Y, Z. But clients aren't looking to hurt us in a product that isn't a fit if their flows aren't a good fit for our desk. Now, there'll be times where clients will say, well, we're paying you X amount of money. And so we want some financing or balance sheet or corporate access or research resource in return, which is a very fair question.

[00:45:49] And then that's my and the senior sales management's job to make sure that we look at and view clients holistically. But very rarely do we see clients now asking for more risk capital or aggressiveness in balance sheet pricing because they're important in another product. So consistency within a product, but not necessarily all around the world and across products definitely makes sense. Sammy, this has been an awesome conversation. Let's finish by having you look forward a little bit. You've been in Amora for 17 years.

[00:46:20] It's been a great run. It seems to me that you're continuing to invest in the platform and you're just excited about it. I'd love to just learn specifically as you sort of think about what's coming. What is it exactly that motivates you to come in the office every day and feel excited? First and foremost, I still love my job. I love going to work every day. I've always told myself if that's not the case, then I'll know it's time for me to do something different. But I love how each year I'm still learning.

[00:46:50] I'm experiencing something new, meeting new sales teams, new clients, et cetera. And as I mentioned, at Nomura, we've had really good moments in the last few years. And we've grown to record revenues. And our management team is incredibly supportive of the sales team and the client franchise. So we're excited about the opportunities. These are interesting markets for sure with a lot of volatility, which creates opportunities for us and our clients. But we're excited to do the potential opportunities that continue to grow and diversify the business. But with that, I just want to thank you. I really enjoyed the conversation.

[00:47:16] You've been a great mentor and partner for me for 28 years now. And so I really appreciate that and really enjoyed the conversation. I'm so glad we got a chance to do this. It was a lot of fun. Thanks, pal. Talk soon.

[00:47:51] Thanks again and catch you next time.