FNG Exclusive… FNG has learned via regulatory filings that FCA licensed institutional broker YCM Invest saw its Revenues drop by more than two-thirds in 2022, as the company rebranded from Finotec to its new name, YCM Invest. (The group’s corporate name was similarly changed, from Finotec Trading UK Limited to YCM-Invest Ltd.)
Revenues at YCM Invest came in at just £767,220 in 2022, versus £2.3 million the previous year, when the company was still known as Finotec. YCM Invest posted a Net Loss of £0.1 million for 2022, versus a Net Profit of £343K in 2021.
On a cash-flow basis YCM Invest saw a £3.5 million Operating Activities cash outflow in 2022. As a result, the company’s Cash levels fell from £4.15 million as at year-end 2021 to just £581,332 in 2022.
YCM Invest is controlled by its longtime CEO, Didier Essemini.
YCM Invest describes itself as a long-established financial services intermediary and investment management firm, operating an execution only trading platform and specializing in OTC and exchange based trading venues. The company’s target market is that of Professional Traders, Asset Managers and Hedge Fund Operators. Its service consists primarily of the consolidation of multiple liquidity sources offered via API connections.
YCM Invest provides a diverse range of customised services to its clientele, as well as the tools and systems needed to set up and operate an FX Business. Since 2008, YCM Invest has operated a Matched Principal business model, ensuring that its interests always align with those of its clients. This decision was based an the realisation that its own earning potential shared strong correlation to its clients’ Life Time-Value; and in order to encourage a strong sentiment of success from its clients, it would need to match its clients’ orders with the market, thereby removing any possible conflict of interest.
YCM Invest offers execution and clearing as well as ancillary technology and investment management solutions to Professional Traders & Brokers, Investors, Asset Manager and Hedge Fund Operators. The company does net onboard or service retail clients.
Core to YCM Invest’s strategy is that it’s a “serviced based” business and is not in the business of ‘taking risks’. As a consolidator of liquidity, YCM Invest is able to eliminate one of the most significant risks its business faces; by providing connectivity from a wide selection of liquidity providers, rather than a direct connection to a less broad selection.
This direction supports and facilitates:
- Confidence that clients are able to access the best available prices at any point of time.
- Continuity of service in the event of a disruption to any single liquidity provider or connection.
YCM Invest said it mitigates its risk of being dependent on active clients by selectively negotiating minimum monthly volume fees, as well as monthly technology and/or service fees. These fees act as a source of stable income for the Firm, and are generated irrespective of whether the client has been sufficiently active during a given period.
Additionally, YCM Invest’s direct cost base is largely variable, which translates to a proportionate reduction in its cost base should the Firm experience a reduction in volume-based income, which did occur during 2022. YCM Invest’s fixed overhead costs are equally considered, with a relatively modest footprint for its size and scale, and in keeping with its position on the avoidance of unnecessary risk.
On the investment management side, YCM Invest operates managed accounts, some of which trade using algorithms produced by parent company, Yedidya Capital Markets, which is a private company incorporated in Israel. Yedidya Capital Markets continues to develop its risk management software with additional layers of artificial intelligence. The intention is to further refine the algorithm’s decision based self-learning engine in order to better predict the impact of low volatility on the market.
YCM Invest is now offering a new kind of managed account for investors whereby investor funds are allocated to the Portfolio Managers accounts of high performing traders who trade using YCM Invest’s brokerage services. The company uses an IP that replays and calculates the “live” historical, day by day statistics of all traders that trade on the YCM Invest platform, with specific focus on downside statistics to get a better appreciation of the risk a specific trader is ready to take in order to generate performances.
The company’s IP relies on a layer of Artificial Intelligence and then recognises patterns of statistic evolution that indicate the future probability of a trader continuing to perform successfully within an acceptable level of risk. According to the traders’ scorings, funds are allocated and their Portfolio Manager account is then monitored.
Traders who generate profit for investors using their trading strategies receive up to 15% of that profit. This arrangement makes YCM Invest’s brokerage platform an even more attractive option for successful traders since it allows for the potential to profit more from the trading strategies they use in correlation to the success of the trades undertaken.
YCM Invest’s view is to keep building its base of successful traders on the platform while simultaneously growing AUM and thereby generating profit for both its investors and traders.
YCM Invest’s 2022 Income Statement and Balance Sheet follow.
