Seven years ago, when I last interviewed Lance Uggla, I found him cocky, almost overbearing, even if I loved his energy and enthusiasm. The Canadian founder and chief executive officer of Markit Ltd., the financial information and services company that is often (though not quite accurately) described as the next Bloomberg or Thomson Reuters, was pumped up by Markit's success and was predicting glories to come.
At the time, an old-fashioned easel, like the ones used by kindergarten teachers a generation ago, was the dominant feature in his slick London office. The easel held a big piece of paper on which "10" was scrawled. I asked him what the number represented. "Ten billion dollars," he said without hesitation. "It's our target valuation, where we think we can be. I'd be disappointed if we were less than that in five years time."
He was off by a few billion, in the wrong direction. Markit's initial public offering last June on the Nasdaq exchange valued the company at $4.3-billion (U.S.). Today, after a galloping bull run, it's worth about $5-billion. Not a bad return in less than a year, but still nowhere near his $10-billion call.
Over breakfast in late March at George, a private club in Mayfair, west London, where he is a member, Mr. Uggla brought up the prediction he had made. "I reread your old article and felt like I really underperformed," he said, laughing.
Still, $5-billion is no laughing matter for a company that began life in 2003 in a barn in little St. Albans, England, with $17-million in startup capital from Canada's TD Securities and 10 employees. Today, it has more than 3,500 employees in 10 countries, including Canada, and annual revenue of more than $1-billion. Markit may not be huge compared with the industry leaders, such as Thomson Reuters, whose stock market value is $32-billion, but the Markit brand has already injected itself into the DNA of the world's financial centres. Markit economists are routinely quoted in the business press and its purchasing managers index – PMI – has become one of the most widely followed indicators of momentum, or lack thereof, in the real economy.
Mr. Uggla insists the $10-billion figure that he had set as a target when I interviewed him in late 2007 was purposely inflated.
"My whole management style is to set audacious goals and work really hard to reach them," he said. "I knew that, even if we got only halfway there, we would be outperforming our peers. So, seven years ago, I used the $10-billion figure to motivate the team."
Mr. Uggla seems to have changed a lot since we met in the heady prefinancial-crisis days. While still affable and enthusiastic, he has dialled back his in-your-face demeanour to the point that he seemed rather relaxed. Maybe, at 53 and at the helm of a company that vaulted from startup to established player in less than a decade, he has less to prove. Maybe he has found some peace five years after he and wife, Julie-Anne, the mother of his four children, separated (Mr. Uggla is single).
He is still chatty, but not the turbo-charged motor mouth of his 40s. He even used self-deprecating humour, a nod to his modest Canadian background: "When you lose it up top, you add it somewhere else," he said, rubbing a beard evidently trimmed at about five-days' growth.
Mr. Uggla is prone to throwing about the strange argot of the financial products world. Customers are "customer sets" and recruiting clients is "onboarding clients." If Markit has not made him a silver-tongued orator, it sure has made him wealthy, but not ostentatiously so.
His George club membership gives him access to the discreet haunt of the FTSE-100 set, London's top hedge fund managers and political power brokers. Its members include Sir Martin Sorrell, CEO of WPP, the world's biggest advertising agency, and it is where, famously, James Murdoch in 2009 told British Prime Minister David Cameron that the Murdoch newspapers would switch their allegiance back to the Conservatives from Labour. Mr. Uggla drives a Range Rover, is restoring a 1967 Aston Martin DB6 Volante and takes heli-skiing holidays in some of the world's most remote and dangerous mountain areas, such as the state of Himachal Pradesh in India's far north.
At breakfast, which began at 7:30 a.m. on a sunny, cool London day in late March, Mr. Uggla wore a Savile Row blue suit, light blue shirt and no tie. While he fit in perfectly with the Conservative and small-C conservative George club patrons around him, I wondered whether his wild side would find a more sympathetic hearing at a boozy, buzzy Soho club, like the Groucho. In fact, his tipple is tequila and he was revving up for a monster party. "In my free time, I like to be with my children and I'm on my way to Vegas for my son's 21st birthday with 10 of his friends," he said, ignoring my suggestion that he watch The Hangover for inspiration before he leaves.
Mr. Uggla ordered poached eggs and back bacon – "hold the spinach" – and brown toast. I decided to live dangerously by going for the hybrid eggs Benedict, featuring ham on one bun, crispy bacon on the other. We both drank copious amounts of coffee even though it tasted no better than the McDonald's version.
Markit is an odd beast that operates in the pre- and post-trade world, filling niches that no bank, hedge fund or securities dealer apparently knew existed before Mr. Uggla whipped up his little financial services revolution a dozen years ago. Markit's debut product was a winner. Using data gleaned from a fleet of credit dealers, it built a credit default swap (CDS) valuation service.
At the time, prices for financial exotica, such as CDSs, asset-backed securities (ABSs) and over-the-counter derivatives were hard to get. Any services that offered transparent, reliable pricing could be sold at fat profit margins, and Markit's were. The genius of the proposition was that Markit's original backers were banks, among them Goldman Sachs, JPMorgan Chase and Merrill Lynch. As owners, the banks had every incentive to supply the credit-pricing information that Markit needed for its databases. At the same time, the banks would, as owners, have no incentive to create competitors to Markit. They would also be high-paying clients.
Mr. Uggla was born in Burnaby, B.C., the son of a peripatetic sawmill manager who now lives in Maple Ridge, just outside Vancouver. Mr. Uggla worked in the sawmills when he was a young man, doing menial jobs. "I remember working really hard and people telling me to slow down and relax – this is an eight-hour job," he said.
Working slowly was definitely not his style. Ambitious and driven, he studied business at Simon Fraser University, received a master's degree in accounting and finance from the London School of Economics and landed at Wood Gundy (later CIBC World Markets) in 1986, rising to head of global sales and trading. In 1995, he crossed the street to TD Securities, where he was responsible for all the foreign debt capital markets business.
At both of the Canadian banks, he gained a reputation as a self-starter with entrepreneurial flair. "I've done a lot of entrepreneurial jobs," he said. "I was a Tin Man between high school and university, knocking on doors selling aluminum siding. Imagine in British Columbia, a province of timber, putting aluminum siding on your house. In those types of direct-selling jobs, you have to be a self starter."
In London, he ran TD's global credit trading operations and began to build a database on credit pricing (TD was one of the first players in the credit derivatives market). Don Wright, the former CEO of TD Securities, now CEO of Toronto's Winnington Capital, was Mr. Uggla's boss at TD and said in a 2007 interview that Mr. Uggla was the best natural salesman and go-getter he had met. "You never had to kick Lance in the butt," he said. "He just goes by himself. He's an unusual guy – either you love him or you hate him."
As the database expanded, Mr. Uggla seized upon the idea of using it to launch a standalone company, one that he would control. TD agreed to come in as a 50-50 partner, but only if Mr. Uggla recruited other banks as partners. By 2003, Markit was on its way, with the banks owning about 70 per cent of the equity (after last year's IPO, their position fell to less than a third).
Today, Markit is a juggernaut in three main businesses: Information (such as CDS pricing); Solutions (primarily Web-hosting services); and Processing, a huge growth area that helps banks and other clients streamline their work flows, such as processing foreign-exchange trades and loan settlement, and meet ever-tougher compliance regulations.
Mr. Uggla loves the regulation frenzy. "Regulation is a tailwind for us, the opportunity comes from the new compliance burdens placed on the industry," he said. "We can provide efficiencies through managed services, usually a platform like KYC [know your client]. It's easy for us to do the same job once for many clients who are all collecting the same information over and over again."
Next up for Markit? Buying market indexes from the banks. They're high-profile, high-margin businesses that can be easily licensed to the exchange-traded funds market. Mr. Uggla will not confirm or deny rumours that he is bidding as much as $1-billion for Barclays' vast index business, which includes the well-known U.S. Aggregate Bond Index.
Mr. Uggla professes endless love for his job, even though its make-it-up-as-you-go days are long gone. Markit is a big business and inevitably will become less nimble as it expands and answers to public shareholders. So would he sell and start all over again?
Forget it, he says. "We've got lots to do," he said, beaming. "We've got to reach the goal on the chart, that $10-billion you wrote about."
In other words, Markit is only half the size he wants it to be.
Lance Uggla, Founder and CEO of Markit Ltd.
Place of birth: Burnaby, B.C.
Education: Simon Fraser University and London School of Economics
Family: Separated from Julie-Anne, mother of their four children, who range in from 17 to 22
Book: The Black Count, by Tom Reiss.
Film: Pulp Fiction
Play: Uncle Vanya, by Anton Chekhov
Holiday: "Anywhere exotic in India, like Goa."
Tailors: Richard James and Alexander McQueen
Everyday car: Range Rover
Collector's car: 1967 Aston Martin DB6 Volante
Sport: Back-country skiing
Artists: Damien Hurst, Richard Prince, Susie Hamilton, Rirkrit Tiravanija