Independent Chicago broker R.J. O'Brien, which got more former accounts from bankrupt rival MF Global than any other merchant, built on that success in December, while other brokers lost some of that extra business, data showed on Monday.
MF Global's fall on October 31 presented a rare opportunity for any one of a dozen independent Futures Commission Merchants (FCMs) to quickly gain valuable new customers from MF Global, which had been one of the world's most active commodity houses.
MF Global collapsed after making bed bets on European sovereign debt. Some FCMs kept growing in December after benefiting from the transfer of MF Global accounts in November, while others lost ground.
R.J. O'Brien, the biggest recipient of MF Global accounts, expanded the gains in its segregated funds by 6.2 percent, or about $208.6 million, in December, according to data from the Commodity Futures Trading Commission. Overall, the company at the end of December had seen segregated funds grow 39.1 percent since MF Global collapsed, adding more than $1 billion.
Executives could not be reached for comment on Monday.
In an interview with Reuters last month, R.J. O'Brien's Chairman and Chief Executive Gerry Corcoran said the company had retained most of the accounts it received from MF Global. The flood of new business accelerated the company's growth plan by at least a year, he said.
Tony Rohrs, a farmer in Ohio, is among the former MF Global clients who have kept their accounts at RJ O'Brien since the transfer. He said he stayed put because his introducing broker, Commodity and Ingredient Hedging in Chicago, is convinced RJ O'Brien is a good firm to be with.
It's really hard to judge which companies are good, he said. I have to rely on my introducing broker, which I've had a really good relationship with.
In December, PFG Best saw a 32.8 percent, or $127.2 million, monthly increase, according to CFTC data.
That increase was somewhat exaggerated by a $105 million wire-in at the end of December and wire-out in the first part of January 2012 for one of the large institutional accounts that was being released by the MF Global trustee, according to PFG Best. The company had previously said it did not hold on to a majority of the MF Global accounts it received.
In total since MF Global failed, PFG Best saw its funds increase 37.6 percent, or $140.9 million, through the end of December.
Rosenthal Collins Group, another initial big winner of MF Global accounts, saw a 7.2 percent decline in December, or about $124.4 million, according to the CFTC. In November, the company saw an increase of $362 million, or 26 percent, nearly five times its three-year monthly average increase.
Rosenthal at the end of December had seen a 17.3 percent increase in customer funds, adding $237.8 million. Executives at the company were not immediately available for comment.
ADM Investor Services, the broker subsidiary of agribusiness firm Archer Daniels Midland Co, saw a decrease of 3.9 percent, or about $108.3 million. In November, ADM saw a $315 million rise, or 13 percent gain in its funds, CFTC data show. The company at the end of December had seen an 8.3 percent rise in segregated funds since MF Global's bankruptcy, adding $206.9 million.
The December decline was part of the normal ebbs and flows of customer seg increases and decreases, said Tom Kadlec, president of ADM Investor Services. The company's relationships with former MF Global clients were very solid, he said.
INTL FC Stone lost 3 percent or $38.8 million in segregated funds in December after nearly matching Rosenthal's acquisitions of client funds in November, according to CFTC data. The company has seen a 2.3 percent decline in funds since MF Global collapsed, a decrease of $29.4 million.
FC Stone Chief Executive Sean O'Connor said the firm remained a winner because it bought MF Global's London Metal Exchange operations.
Overall, assets in segregated funds held by FCMs contracted for a second month in December, providing further evidence of the tentative pullback from futures markets after MF Global failed. Some commodity traders have said they took money out of the markets because the bankruptcy shook their confidence in the markets.
Total segregated funds at the end of December were $145.5 billion, down 2.4 percent from the end of November and 4.9 percent from the end of October, CFTC data show.
(Additional reporting by Cezary Podkul and Jeanine Prezioso in New York; Editing by David Gregorio)