MF Global Holdings Ltd., the futures and options broker headed by former New Jersey Governor Jon Corzine, may add as many as 1,000 positions as it expands into money management and investment banking.
“We’re a broker on our way to being a broker-dealer on our way to being a full-line investment bank,” Corzine said Tuesday at the Barclays Global Financial Services Conference in New York. “I would expect that two years from now when I’m at this conference, we will not be a 3,000-person firm. We’ll be a 4,000-person firm.”
Corzine, the 63-year-old former New Jersey governor who ran Goldman, Sachs & Co. from 1994 to 1999, became chairman and chief executive officer of the derivatives broker in March, returning to Wall Street after the worst financial crisis since the 1930s and his election defeat last year. New York-based MF Global has applied to become a primary dealer of U.S. government securities to expand its business into trades in which it takes on the kind of risk associated with the world’s biggest banks.
“I’m very, very focused on broadening out our commodity footprint,” Corzine said. The company will add principal risk takers, he said, as well as “a few more risk monitors and a few more folks on the control side.”
In May, Corzine called MF Global’s fiscal 2010 performance “unacceptable” and announced job cuts of as much as 15 percent of its 3,200 workers. Twelve percent of the workforce has been eliminated so far, some lost to competitors as the company reduces its compensation ratio by 50 percent, he said.
Corzine took over at MF Global as business was hurt by low interest rates and depressed trading volumes for futures. The firm’s plan to become a primary dealer is a major part of a strategy to boost revenue, he has said.
“It’s very important for us to get to advisory and fee- based activities for us to be successful,” Corzine said Tuesday. “If I were standing here in 18 months and we hadn’t begun to generate those kinds of revenues inside the firm, I’d be disappointed.”
MF Global, the former brokerage unit of Man Group Plc, the world’s largest publicly traded hedge-fund manager, reported net income of $8.8 million, or 1 cent a share, in the fiscal first quarter ended in June, compared with a net loss of $25.2 million, or 27 cents, a year earlier, according to a statement Aug. 5. Corzine earlier this year promised investors a return to profitability.
“We might have to do some kind of merger,” he said today, referring to future expansion. “But in general it’s going to come from internally generated growth.”
MF Global was unchanged at $7.31 in New York Stock Exchange composite trading. The stock has climbed 5.2 percent this year.
Benchmark interest rates near zero percent have cut into the broker’s interest income, the revenue it receives from client money it holds as collateral for trades on exchanges. A decline in the amount of borrowed money used to trade after the credit crisis has also slowed demand for futures and options.
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