From US Navy pilot to fintech entrepreneur — our guest co-founded Securrency, acquired by DTCC in 2023, and is now bringing his Middle Eastern experience to Demeter. Joining me today is John Hensel, Senior Vice President Middle East Markets at Demeter. Jon, welcome to the show.
Thank you, Rachel. Thank you for having me.
DTCC recently announced that the largest tokenisation of live US trades has been successfully processed. And this is the same technology that you built. What does it mean to see infrastructure that was designed and built here in Abu Dhabi exported to the world?
Frankly, it is a significant point of pride for us. The team came together starting back in 2015 and built technology in conjunction with regulators — particularly with the Financial Services Regulatory Authority here in ADGM, and also in conjunction with the SEC and the Australian Securities Investment Commission, conducting tests and demonstrations of the technology at the time. This was really very progressive. And as we worked through this, we gained additional notoriety and with that the attention of institutions such as DTCC.
How have you seen ADGM mature into the financial ecosystem it is today — and what made Demeter choose it as its Middle East base?
The first time I was really exposed to ADGM and the vision of the jurisdiction was in 2017. What I have seen is a very important attribute: consistency. There has always been a consistency around building a world-class financial institution, a regulatory framework that meets and exceeds the standards of institutional finance, and that it is accessible. Whether it was with Securrency, helping build out the financial centre, or now with Demeter bringing world-class financial products to market — we see that consistency in the ADGM message as an important part of why we have made the decision to come here.
Walk US viewers through Demeter's systematic strategy and why price alone is such a powerful predictor.
Eugene Fama was a professor at the University of Chicago. My partner Jeffrey Sexton, the founder of Demeter, was a student there some 20 years ago and conducted research with Fama. One of the principles rooted in our approach is that price is the ultimate aggregator of all market intelligence. We use structural phenomena to dictate whether or not we want to take exposures to the market or retreat to a safe haven. The assessment takes place at 3:59pm New York time. We look at pricing signals from a myriad of sources and evaluate using academic or structural phenomena to determine the potential of the market the next day. We are a long-only trading strategy with a one-day trading horizon. In a matter of seconds, we conclude whether there is potential in the market — if there is, we take exposures to S&P 500 or Nasdaq 100 futures. If not, we retreat to a Treasuries position. The next day, we re-evaluate at 3:59pm. It is purely systematic — no manual intervention, no emotion. We have been doing this for more than 14 years and have had tremendous success.
How does this proposition land with GCC institutional investors who have traditionally favoured real estate and private equity?
In this part of the world, I have been living here for nearly ten years and have come to understand that most investors are exposed to either real estate, private equity, or other investments they are familiar with. A diversified portfolio is an important way of hedging against risk — as we have seen in recent world events, particularly in this region. So when investors look at equity markets, the easiest access is usually through an exchange traded fund — often passive exposures to a large basket of assets. Our approach wants exposure to the same products — S&P 500 or Nasdaq 100 — but not indefinitely. We are actively managing that exposure with a one-day trading horizon. It is purely mathematics. There is no emotion or headlines moving our decision-making process. For investors in this region seeking exposure to public equity markets but wanting a systematic strategy that can give outsized returns and hedge against risk in unfavourable conditions, Demeter is a compelling fit.
Thank you so much for joining us today, John.
That would be great, Rachel. Thank you very much.
