Martin Mulligan is the Founder of Vuca Treasury London. Established in March 2020, Martin in his own words explains, we help business clients improve the way they manage financial risks. Large listed companies have their own internal treasury teams to help them set the right strategy, identify the right products and negotiate the right terms-including price. SME and large private businesses face many of the same challenges but lack the dedicated internal resources to make the same informed decisions when funding their businesses or managing currency, commodity and interest rate risks.
Our team at Vuca Treasury is largely made up of ex-bankers who’ve worked as client directors with portfolios of large corporate and institutional clients in the capital market divisions of banks around the world. We’ve left the dark side and now use the knowledge and experience from our days in banking to give our clients the tools they need to manage their financial risks more effectively.
You can visit the Vuca Treasury website here
What are your main priorities and goals in your role?
Too often, clients operate under the mistaken belief that the salesperson at their bank or FX broker is an advisor. In reality, salespeople only get paid if they sell you a product and their interests aren’t necessarily aligned with those of our clients.
Our priority is to become a trusted advisor to our clients and give them the independent information they need to make informed decisions. As our interests are aligned with those of our clients, our goal is to give Finance Directors and the senior management teams the confidence that they are doing the right thing.
What are your biggest challenges?
Outside of the obvious challenges with operating a business during a pandemic, the biggest challenge at the moment for me personally is striking a balance between the fun stuff; which is solving problems for clients and the boring but important administrative responsibilities that go with running a new business; like applying for FCA regulation, setting up websites and paying the bills!
How has your business strategy been adapted in the context of the Covid-19 crisis?
As we only started trading earlier this year, operating in a COVID-19 world is all we’ve known! We’ve become very comfortable very quickly with cloud computing, working from home and using technology like Zoom and Teams to stay in contact with each other and with clients.
In terms of strategy, we’re scaling a little slower than we would otherwise have liked as we’re keeping a tighter handle on costs until the outlook improves
Tell us the about the biggest risk you have taken in business.
I moved to London from Australia during the Financial Crisis in 2008 for a role with Lloyds Bank and set up Vuca Treasury earlier this year during the pandemic. I seem to make large risky decisions during times of great global uncertainty! Hopefully for the global economy, all my big risky decisions are behind me!
Tell us about the worst day you’ve had since you started in business.
Two spring to mind. The first was in January 2004 while working in the dealing room at NAB in Melbourne and it was discovered that the FX options trading desk, a team I sat quite close to, had been hiding unauthorised losses of over A$500m. This was a massive event for the bank, corporate governance in Australia, and FX markets at the time. The second was 5 years later, on the day Lloyds Bank made large scale redundancies after the merger with Bank of Scotland. Although I had been told my role was safe, it was still an incredibly stressful day and impossible not to be affected by the impact on the lives of the many friends and colleagues who were being told that there was no longer a role for them at the bank.
How can IIBN members help your business?
The obvious way is to keep Vuca Treasury in mind if they know of businesses that need external funding or trade internationally-more clients are always welcome! Outside of that, as a first-time entrepreneur with a business that’s been trading for less than 12 months, every day’s a school day! The IIBN is a great way for me to build out a professional network with other members on a similar journey, share war stories and learn from each other’s mistakes.
How will Brexit affect you, or have you started to feel the effects already?
In the short term, we’re busier as clients are approaching us to help them understand and manage their currency risks. For example, we’re currently working with a global consultancy who haven’t historically hedged currency risk but have a cost base in pounds and revenues in dollars and euros. They don’t have a strategy or policy to manage currency risk and are seeking our input here.
Longer term, we have clients in Ireland and the UK so it’s important that we can service both sets of clients. Being Irish or British, all of our team will retain free movement between the islands but we may need to restructure the business depending on what the final relationship looks like.
How do you define success and what drives you to succeed?
As an independent advisory business, our success is defined by the outcomes we deliver for our clients. My drive to succeed comes from a desire for Vuca Treasury to be recognised in the industry as a strong competitor and to be viewed by colleagues as a great place to work
What’s the best advice you’ve been given, or would give, in business?
Hope is not a strategy!
Frequently, even large companies don’t have a policy or an articulated position when it comes to managing financial risks within their businesses. This can work out fine when markets are stable but can leave them exposed when banks appetite to lend changes or currency markets become more volatile. Having a board approved policy on managing financial risks provides a framework to manage risk and reduces the risk of losses due to adverse market moves, errors or fraud.
What have been your highlights in business over the past year?
Turning the lights on! Although the team is very experienced, as a business we’ve only been trading since the end of March. Getting that first customer mandate which was to arrange an Interest Rate Cap comes a close second
What opportunities or plans for growth do you see in 2020/21?
We expect 2021 to be a very busy year for us as it will be the first year of the new EU/UK trading relationship and the currency market is always the first market to adjust to change. We anticipate that the pound/ euro currency pair will be more volatile next year than in any years since 2016. In the UK, the transition from Libor to SONIA as the benchmark rate on corporate loans and interest rate derivatives from the end of 2021 will mean that many loan and interest rate hedge documents will need to be repriced and restructured. This will be a big issue for many companies who will need to understand how this change affects them financially, legally and operationally.