Whether it was introducing Commodity Futures Trading Commission Chairman Gary Gensler’s keynote address or sharing his witty take on NASCAR advertising with reporters, IntercontinentalExchange founder, Chairman and CEO Jeff Sprecher was the man about Boca at last week’s International Futures Industry Conference. There is no doubt that Sprecher is at ease in the spotlight that comes with ICE’s play for NYSE Euronext. Below are a few of the opinions Sprecher shared throughout the week.
On the very timely issue of exchange mergers and acquisitions: “We’ve had to move things around like chess pieces in order to keep up with our client needs. We think that’s driven a lot of growth for us. M&A has not so much been about trying to get big for scale sake. It’s about trying to have enough pieces to solve customer problems.”
On the greatness of U.S. capital markets: “The public markets are a great place to raise capital. When my company went public, I think our market cap was about $600 million in 2005. If we close our deal with New York Stock Exchange, we’re going to be about a $20 billion company. To go from $600 million to $20 billion in about eight years could not be done without access to the public capital markets. … There are a lot structural issues that we want to try to solve. But I think sometimes we spend so much time talking about those that we don’t talk about the greatness of the ability to raise capital. My company is the quintessential example of that.”
On today’s “historic” interest rate environment: “Part of why we have the audacity, if you will, to try to acquire NYSE Euronext is that money is cheap. If we weren’t buying NYSE Euronext, frankly, we would be borrowing money to buy back our own stock. This is a moment in time that is quite historic. You gotta believe that in a zero interest-rate environment, money is flowing into places where it wouldn’t otherwise flow if there were “normal” interest rates. As interest rates rise, we are going to suddenly discover where all of that borrowing went. There will be an “oh my gosh” moment, I suspect, if the rise is anything other than gentle.”
On accessing Chinese markets: “In our energy products, 3 of the 4 Chinese oil and petrochemical companies have been locating their people in London to access our London markets. We’ve been incredibly fortunate that we haven’t had to figure out the access issue. They’ve come to us, not us to them.”
On how the collapse of Enron reshaped the energy markets: “Enron, for the energy business, was our Lehman collapse. There was no regulation that forced more listed trading. There was no regulation that forced more clearing. It was the natural response by well-intended managers.”