he economic crisis has hit small and medium-sized businesses hard. Some have stumbled, some have fallen, but others have picked up the pace and have outperformed even the largest firms. The way we do business has changed over the years. We have seen real economic shifts, globalisation and the rise of emerging markets and the internet.

One thing that has remained constant is the power of the entrepreneur. For the last 10 years, Ernst & Young has awarded the World Entrepreneur of the Year Award. This prestigious award recognises the contribution of people who inspire others with their vision, leadership and achievement. The programme celebrates those who are building and leading successful, growing and dynamic businesses, through regional, national and global award programmes in 50 countries.

Michael Spencer, CEO of electronic interdealer broker ICAP, has won this year’s award. He is a textbook example of an entrepreneur. He set up Intercapital Private Group Limited in 1986 with three friends and £50,000, initially to concentrate on the new interest rate swaps market. In the 24 years since, what started as a small venture between friends has become the world’s largest interdealer broker, conducting an average of $1.5tn in trades each day. From the original four people, the company grew to over 300 worldwide, with offices in London, New York, Syndey, Singapore and a joint venture in Tokyo.

An interdealer broker draws together willingness to buy and sell in wholesale markets. ICAP uses voice broking or electronic networks to bring these buyers and sellers together, facilitating price discovery and receiving a commission when a transaction is entered into. In many of the markets where ICAP operates, voice brokers help to create liquidity and facilitate the price discovery process. This is particularly important in non-standardised, bespoke markets where the number of parties willing to enter certain transactions may be limited. In more standardised markets with higher and more frequent participation, ICAP operates electronic broking platforms. The company’s combined solution offers access to markets across all asset classes and levels of liquidity.

With this formula, ICAP has been the best performing financial stock in the FTSE 100 index over the past decade, providing post trade risk and information services and handling a large portion of the world’s foreign exchange and financial instrument transactions.

For Spencer, the defining characteristic of entrepreneurial spirit is two-fold: ‘It involves being able to recognise the opportunity in the first instance and then to act upon it. I have sought to maintain this spirit and infuse it within the culture of ICAP for over 20 years, especially as the company has grown into a blue chip, listed company.’

Ten years ago it was clear to Spencer that the interdealer broking industry was seeing a structural shift into electronic broking. ‘We saw this as a unique opportunity to position ourselves to be part of what we thought would be a higher-margin business.’ As a result of that positioning, ICAP now trades on a much higher price-earnings multiple than some of its peers – and 60% of the global interdealer spot foreign exchange market and US treasury cash market is traded on ICAP operated electronic broking platforms.

‘Currently we are in the midst of a challenging and rapidly evolving, economic and regulatory environment,’ says Spencer. ‘As our customers’ and clients’ needs change, we continue to challenge ourselves and seek out opportunities to adapt and improve our business in order to deliver them the best trading solutions they need.’ As a consequence, ICAP has purchased a number of businesses, including BrokerTec, EBS, Link, Reset, Hyde and Arkhe. Some of these businesses have been more successful than others – but it is this willingness to try new things and challenge the structure of markets that has made ICAP such a successful company.

And it does not end there. ‘We believe that the continued electronification of the OTC space will be the big story this year and next year. We have invested heavily in technology over the past five years and we think that places us at a competitive advantage for the wave of change that we see coming. We are plum-placed to benefit from this.’

But is today’s business climate really leaving room for growth? ‘I believe there is room for growth in today’s climate and that we are well positioned to benefit from it as more normal trading conditions return to our markets. We have sustained our core business during the market turmoil and retain our leading position in the largest and deepest OTC markets. To further diversify our revenue base we have made substantial investments which we expect will make a material contribution to ICAP’s revenue and profit in the future. We have established a material presence in post-trade services and continue to develop new products to meet the infrastructure needs of our markets.’

For those considering starting their own business, Spencer has some valuable advice: ‘ICAP is a company where entrepreneurial people are given controlled freedom to try new ideas. The firm has evolved into a conglomeration of small entrepreneurial businesses, each, in turn, led by an entrepreneurial manager. I believe a true entrepreneur is able to surround him or herself with, and empower, high calibre individuals who challenge his or her decisions.’