Participants

Robert Coates; Head of Investor Relations; Marex Group PLC

Ian Lowitt; Chief Executive Officer, Director; Marex Group PLC

Rob Irvin; Group Chief Financial Officer; Marex Group PLC

Paolo Tonucci; Chief Strategist and Chief Executive Officer of Capital Markets; Marex Group PLC

Ben Budish; Analyst; Barclays

Patrick Moley; Analyst; Piper Sandler & Co

Kyle Voigt; Analyst; KBW

Carlos Gomez-Lopez; Analyst; HSBC

Presentation

Robert Coates

Good morning, everyone. I'm Robert Coates, Global Head of Investor Relations for Marex. Thank you for joining us today for our results conference call. Speaking today are Ian Lowitt, CEO; and Rob Irvin, CFO. After the formal remarks, we will open the call up for questions.
Before we begin, I would like to highlight that certain matters discussed on today's conference call are forward-looking statements relating to future events, management's plans for the business and the future financial performance of the group, which are all subject to risks and uncertainties. Actual results could differ materially from those anticipated in the forward-looking statements.
The risk factors that may affect these results are referred to in the company's press release and our previous prospectus filed with the SEC. The forward-looking statements made today are as of the date of this call, and the company does not undertake any obligation to update these forward-looking statements.
Finally, the speakers may refer to certain adjusted non-IFRS financial measures on this call. A reconciliation of the non-IFRS financial measures to the most directly comparable IFRS measures is available in the company's press release. A copy of today's release and the investor presentation can be found on the Investor page of marex.com. With that, I'll hand over to Ian.

Ian Lowitt

Good morning, and welcome to our fourth quarter and full year 2024 earnings call. I'm delighted to present Marex's first set of annual results since our IPO last April, and I'm proud of all we have accomplished in our first year as a public company. Our performance demonstrates that we are successfully executing our strategy, and it is delivering value for our shareholders, clients and other stakeholders.
As of year-end, our share price had risen by around 64%, putting us in the top quartile of US IPO performance in 2024, with further price appreciation since then. During the year, we have taken opportunities to grow both organically and inorganically, broadening our product offering and geographic reach.
As a result, we have increased our relevance to a larger and growing client base, enabling us to gain market share. We have built a platform that is both diversified and resilient when we believe can deliver growth across a range of market environments.
As I've said before, we are grateful for the enthusiastic response we have received from the market and for the time investors and analysts have spent engaging with us to understand the Marex story. We have learned a lot from you and your insightful questions about Marex.
Moving now to Slide 4 and a summary of our performance highlights. Our fourth quarter performance was strong in what is typically the slowest quarter seasonally. We saw a continuation of the themes we experienced throughout the year: a supportive market backdrop, continued market share gains and momentum across all of our businesses.
We continue to strengthen our position in the market, with Marex outpacing growth in overall volumes in the markets in which we operate. This was particularly the case in our securities business, where we are now benefiting from the integration of TD Cowen's prime services business and the extension of this capability on balance sheet.
Plant activity levels remained robust, as average balances grew to $15.5 billion in the fourth quarter. This resulted in Q4 net interest income of $63 million, broadly in line with Q3 2024. We delivered record full year adjusted profit before tax of $321 million, up 40% year-over-year.
As the acquisitions we completed in 2024 were very small bolt-on, the preponderance of the $91 million increase in profit was due to organic growth. The first shareholder sell-down post-IPO was very well received by investors, demonstrating strong levels of institutional support for Marex and increasing liquidity in our stock, as our free float increased to 52%.
And we diversified our funding sources and liquidity headroom to support future growth of our platform through a $600 million issuance of senior unsecured notes. Finally, consistent with the capital allocation policy set out at IPO, we will be paying a dividend of $0.14 per share this quarter.
Slide 5 shows the key metrics we are focused on, namely, growth, margins and returns, productivity and quality of earnings. In 2024, revenues grew 28% to $1.6 billion, and our adjusted operating pretax margin increased to 20%, delivering the 40% growth in adjusted profit before tax year-over-year. Our reported return on equity was 25%, up 6 percentage points year-over-year.
When you exclude nonoperating items, the majority of which are not expected to occur now that we are a public company, adjusted return on equity was 30% for 2024. In terms of productivity, profit per FTE was $99,000, up 16% year-over-year. And our adjusted sharp ratio of monthly PBT was an extraordinary 5.2%, reflecting the high quality of our earnings in 2024.
Looking now at exchange volumes on Slide 6. The aggregate markets in which we operate have grown at a double-digit rate since 2021, supported by secular growth trend. In 2024, exchange volumes grew 11.5%, with commodities growth of 20% outpacing financials of 10%, driven by strong metals and energy market volumes during the year.
Financials now make up around 40% of our revenues across our segments, helping to diversify our earnings. We believe this product diversification makes us more resilient, increasing our confidence in being able to continue to deliver profit growth through a variety of macroeconomic and market conditions.
As we look at the operating environment on Slide 7, commodity prices and volatility were lower in 2024, with the exception of the elevated metals market conditions in the second quarter that we referenced on earlier calls. Rates have reduced, and although the Fed funds forward curve is higher than it was pre the US election, it is predicting three rate cuts this year.
Against this backdrop, our business continued to grow strongly, and we are confident that the platform we have built and the investments we have made will result in structural growth through the cycle. It is clear from the data on Slide 8 that there is increasing client activity on our platform, and we are gaining share.
For example, in 2024, market volumes in clearing were up 12%, while Marex volumes were up 30% and revenues up 25%. Within Agency and Execution, energy market volumes rose 22%, while our volumes were up 27% and revenues up 30%. In Securities, market volumes rose 10%, while our volumes rose 23% and our revenues are up 27%. Market Making volumes were up 20% in the market, while Marex volumes were up 44% and revenues up 34%.
When you look at our various businesses on this basis, it is clear that we are consistently gaining market share, with all our business segments growing faster than the market, which itself is growing at a healthy rate.
On Slide 9, you can see how we have delivered another year of sequential growth and maintained a 35% CAGR in adjusted profit before tax over the last 10 years. We have demonstrated our ability to grow through a variety of market conditions and our continued momentum. We are delivering on our strategy, ensuring that we have sufficient structural growth through product and geographic diversification to offset cyclical headwinds. I'll now hand over to Rob for a more detailed review of our financials.

Rob Irvin

Thanks, Ian, and good morning, everyone. Turning to Slide 11. As Ian said, we had another strong quarter. Q4 revenues grew 28% to $416 million, reflecting strong levels of client activity and favorable market conditions. Adjusted profit before tax grew 55% to $81 million.
On a full year basis, we grew revenues by $350 million to $1.6 billion. Over 70% of this growth was organic.Total costs increased 28% as we continue to invest in both our front office and our control and support functions to support future growth.
Adjusted profit before tax was $321 million, ahead of the guidance range we gave at Q3 earnings of $300 million to $305 million. Adjusted profit before tax margin increased 200 basis points to 20%, demonstrating our platform's ability to deliver scale benefits. As I've said before, our nonoperating adjustments of $25 million were primarily related to our IPO and historic fees paid to our private equity shareholders.
As a result, we would expect minimal adjustments between our adjusted and our reported profit before tax metrics going forward, as seen in the third and fourth quarters. Adjusted return on equity rose to 30%, while adjusted diluted EPS was $3.07 per share, up 33% year-over-year.
As you can see on Slide 12, all of our business segments delivered strong double-digit revenue and adjusted profit growth for the full year. I'll focus on our quarterly segmental performance on Slide 13. Clearing revenue grew 48% to $125 million, driven by growth in net interest income, primarily reflecting higher average balances and commission income.
Contracts cleared increased by 27%, well above the market volume growth of 7%, demonstrating again the market share gains that Ian highlighted. Adjusted profit before tax margin was 53% for the quarter, in line with the full year. Agency and Execution revenue grew 22% to $192 million, with a strong performance in both our Securities and Energy businesses.
Securities revenue growth of 25% reflected the impact of the TD Cowen acquisition and organic growth within our rates and FX businesses. Revenue in our Energy business grew 17%, reflecting continued high activity levels in European energy markets, strong demand for our environmentals offering and the benefit of our bolt-on acquisitions.
Our adjusted profit before tax margin within this segment improved to 19% as we continue to optimize and integrate our acquisitions. Market Making revenue grew 19% to $45 million, with strong growth across agriculture, securities and energy more than offsetting a weaker quarter for metals. Hedging and Investment Solutions revenue grew 20% to $40 million, as the business benefited from our investment in growing our sales team and onboarding of new clients.
Turning now to Slide 14. Average balances in the fourth quarter increased to $15.5 billion, up from $10.9 billion in the fourth quarter of 2023. We have grown average balances every quarter this year. As a reminder, these are daily average balances, which we think are a better reflection on what drives our net interest income. Q4 net interest income was $63 million, taking our full year net interest income to $227 million.
The full year net interest income growth reflected a number of drivers: higher average Fed fund rates, which increased to 5.2% for the year; growth in average balances from $12.9 billion to $13.5 billion, including the addition of TD Cowen's prime service business within Agency and Execution; and in 2023, we carried some fixed investments in US treasuries, which have subsequently rolled off and been reinvested at higher rates.
It is important to note that net interest income does not just impact our Clearing business. Within Agency and Execution, prime services will be a growing contributor to net interest income as we continue to build out this capability. And our Market Making and Investment Solutions businesses incur interest expense as they use funding to support their activities.
As before, we have given you our illustrative rate sensitivity, which indicates that a 100 basis points decrease in rates across the full year would reduce adjusted profit before tax by around $20 million. This is, of course, assuming a static year-end balance sheet and ignoring any future book growth.
Taking this into account, and our adjusted profit before tax increase of $91 million this year, we would see this as very manageable. Turning to our balance sheet on Slide 15. Total assets increased from $17.6 billion at the end of 2023 to $24.3 billion at year-end 2024. This growth was primarily due to higher client activity levels and as we continue to grow and diversify our sources of liquidity.
As you can see, the majority of our balance sheet consists of high-quality liquid assets which support client activity. Looking by activity type, we can isolate buckets of assets and liabilities that net off against each other. Once netted, we're left with a corporate balance sheet which is carrying corporate cash and other assets against group liabilities, including our structured notes portfolio and senior note issuance. It's important to emphasize that we maintain very low levels of net debt and leverage, as our residual corporate balance sheet is relatively modest.
As you can see on Slide 16, we continue to maintain prudent levels of surplus capital and liquidity, which support our investment-grade credit ratings with both S&P and Fitch. Our total capital ratio of 234%, well above the minimum required levels, and liquid headroom of over $1 billion, ensure that we're well positioned for periods of market turmoil. And as you heard from Ian, we have announced a quarterly dividend of $0.14 per share to be paid on the 31st of March 2025 to shareholders on record as at close of business on the 17th of March.
Turning to Slide 17. As usual, I will conclude with a view on risk. We have a proactive and involved risk management approach at Marex. In Market Making, we are a client flow-driven business and do not take a directional view on prices. However, we do carry a small level of inventory to source client demand and capture the trading spreads. Average daily VaR, or value at risk, has increased slightly to $3.2 million in 2024, reflecting growth in our Market Making business. However, it remains at a very low level.
During 2024, we wrote off 7 specific historical provisions, which have previously been fully provided for. Within the P&L, we had a release of $1.7 million, reflecting our proactive credit risk management approach, which has resulted in partial recoveries of provisions we've previously taken. Now I'll hand you back to Ian for an operational update.

Ian Lowitt

Thanks, Rob. Nearly one year on from our IPO, we thought it would be helpful on Slide 19 to remind you of the things we said we would do when we came to market last April and what we have delivered since then. I've covered many of these already, so I will spend some time on the next few slides on how we are executing our growth strategy and gaining market share. In 2024, we continue to diversify our revenue base, increasing our presence in our growth markets.
As you can see on Slide 20, EMEA is our largest market, generating 56% of Marex's revenue and growing at a 34% CAGR. Within EMEA, we announced the acquisition of UK-based FX specialist Hamilton Court Group. This acquisition will expand our FX offering and complement our existing solutions business, adding around 1,000 corporate clients.
We also announced the acquisition of Aarna Capital, an Abu Dhabi-based clearing firm, which is expected to add 135 new clients, posting $330 million of cash balances. The Middle East is an important market for us, and this acquisition will accelerate our growth while expanding our international client base. The Americas is our next largest market, growing at 58% CAGR and now a significantly larger portion of our revenue total at 36%.
During 2024, we fully integrated the prime services and outsourced trading business we acquired from TD Cowen, which generates around 70% of its revenue from the US This contribution to growth in our Securities business, particularly in the second half of the year. While APAC is our smallest region, it's just 8% currently, is growing the fastest at a 69% CAGR. We continue to see significant growth opportunities here with the clearing memberships of ASX and SGX that we added at the end of 2023 helping to expand our platform in the region.
Turning to Slide 21. Our strategy has been highly successful in bringing new clients onto our platform, with a total number of active clients increasing to over 5,000 by the end of 2024. It has also enabled us to increase the amount of business we do with our largest clients. The number of clients that generate more than $1 million of revenue has increased 17% to around 270, while the clients that generate between $250,000 and $1 million has increased 15% to around 620.
We see many more opportunities to offer more products to our clients so they experience the full value proposition from the Marex platform. Turning to 2025. We've made a strong start to the year with positive momentum continuing into the first two months of the quarter, reflecting strong levels of client activity on our platform, consistent with higher market volumes as reported by the exchanges. We expect to close the two acquisitions I mentioned over the next few months and continue to make selective inorganic growth investments in line with our strategy.
In terms of organic initiatives in 2025, as you've heard, we have momentum across all our business segments. In Clearing, we continue to onboard new clients and expand our asset classes, including crypto futures and single stock options. At year-end 2024, we were ranked the number one nonbank FCM and eighth overall, outperforming a number of banks, including BNP, Mizuho and UBS. In Agency and Execution, we continue to grow our presence in the securities market, allowing us to diversify our asset class coverage and complement our strength in commodities.
Our investments in prime services and capital markets product lines have created additional growth opportunities for us, as we can bring a wider range of complementary services to our clients. In Market Making, we continue to see growing demand for our renewables and environmentals offerings and to support our clients as they seek to meet their sustainability goals.
And demand for hedging solutions in commodities and FX markets remain strong as we continue to make investments in our technology and expand our product and geographic coverage. These 4 closely interconnected services reinforce one another, produce multiple entry points for clients and increased cross-selling opportunities for Marex across our platform.
In conclusion, our diversified and resilient business delivered strong performance in 2024. We remain proud of the sequential growth we have generated over the past 10 years across a variety of market conditions. The scalable platform that we have built has also resulted in continued margins and return improvement. Our performance underpins the investment thesis we outlined and discussed at our IPO.
We're also making progress with both our organic growth initiatives and inorganic investments to add new clients to the platform and expand the products offered to these clients and grow our market share. Finally, we are planning to host an Investor Day on the second of April in New York. We intend to use this as an educational session for investors, with the aim of providing a deeper understanding of Marex and its businesses and allowing you to meet our management team.
Just one year on from our IPO, you wouldn't expect any change in strategy, which as you've heard today, we are successfully executing and is delivering value for our shareholders. I look forward to seeing many of you there, if not before. And with that, I'd like to open for questions.

Question and Answer Session

Operator

(Operator instructions)
Ben Budish, Barclays.

Ben Budish

Hi, good morning and thanks for taking the question. Maybe just to start, Ian, could you talk a little bit about the Q4 results? I'm specifically curious about the big step-up in collateral balances. How much was due to onboarding new clients? How much was due to the pickup in volatility that might have driven collateral requirements at the exchanges? How do those two pieces sort of factor in? And then we're a little over two months into Q1, curious if you can give us an update in terms of what you're seeing quarter-to-date as well?

Ian Lowitt

Sure, Ben. Thanks for the questions. So I think as you sort of identified, I think that the increase in balance is a function of those two things that you've identified. So we are adding sort of clients to our platform. And we are also sort of seeing average balances sort of increasing partly through an increase in business, but also as a result of sort of increases in margin rates.
It's hard for me to sort of separate it out into precise percentages for each of those. As you would expect within Clearing, there isn't it takes a while for sort of Clearing clients to come on to the platform, so that lead time is actually quite long and is measured in months or even in quarters.
So what you saw in the fourth quarter wasn't sort of the effect of just a very large number of clients coming on to the platform. It was sort of part of a steady increase of clients through the course of the year, which is continuing into this year. So more of it, I think, would be a function of sort of more activity and higher balances. And that would be what we would be seeing continuing into this year.
I mean, the 1 thing that I think I had referenced a few times is what we are seeing is us winning sort of competitive mandates with some of sort of the largest sort of Clearing clients. And so, we're certainly seeing the impact of adding in not just sort of small and midsized clients, but actually some sort of the larger mandates. And that will sort of continue in a slow and sort of steady way sort of through the course of the year.
Your second question was around the first quarter. I mean, obviously, we're only two- and a-bit months into that. So we don't know how the whole quarter will turn out. But as I'm sure you and your colleagues will have seen, exchange volumes have been sort of elevated, both year-on-year as well as quarter-to-quarter. And we're certainly seeing the effect of that.
The world is a more volatile place, and you sort of see that in the volatility of underlying asset classes. And again, that sort of combination of increased volumes and higher volatility is clearly the environment that is helpful to a business like Marex and represents the right kind of backdrop to the more structural trends which are sort of adding clients and doing more business with them.

Ben Budish

Got it. Helpful. Maybe just one more kind of like into weeds questions. On the securities revenues within Agency and Execution, those jumped quite a bit quarter-over-quarter as well as year-over-year. Maybe a similar question, can you kind of unpack what's going on there? And you sort of talked about making progress with the legacy Cowen prime brokerage business and that customer base. Can you speak a little bit more to what's going on there? What specifically happened in Q4? And similarly, how you see that opportunity into '25?

Ian Lowitt

Yes. I mean, fortunately, we have Paolo with us, who runs that business. So actually, I'll pass that one on to Paolo.

Paolo Tonucci

So I think what you're seeing is a growing momentum. It's a relatively high cost the high-cost base. So the profitability increases quite significantly as you sort of get to scale. We saw that in the second half of the year. So we're really only in the second half of the year to really, I think, start adding the full range of products and the full set of capabilities, which include capabilities around stock lending activities.
When we talk about being on balance sheet, it's predominantly being able to provide that sort of that full range of stock lending, the second half of the year is when we started winning client mandates, quite a stable business. So in the second half, we saw the impact of high levels of commissions and higher asset balances with those clients. And it really it was quite progressive. So through the second half of the year, we've seen some improvements almost every month.

Ian Lowitt

And I think sort of just drawing on that theme there, Ben, we've talked a lot about how part of what we look for in acquisitions is an opportunity to sort of raise its underlying level of profitability by making it part of the Marex platform and offering clients a broader a set of services or capabilities that they had sort of previously. And I think that what we're seeing in this acquisition is completely consistent with that, which is a good underlying business. That business is continuing to perform well. But we're seeing lift as you make that a part of the Marex platform and broaden the set of things that are available to the clients that come over as part of those acquisitions.

Ben Budish

Okay. Got it. And looking forward to seeing you in New York next month.

Ian Lowitt

Good, we look forward to seeing you.

Operator

(Operator instructions)
Patrick Moley, Piper Sandler.

Patrick Moley

Yeah, good morning. Thanks for taking the question, Ian, you sort of mentioned it in your response to the first question you got there. But when you think about the just overall market share gains, you're seeing specifically in the trading business, you've talked about taking share from clients that the banks are just finding it harder and harder to service, as well as from smaller competitors that are finding it harder to compete. So when you look ahead to the rest of this year and just going forward, where do you see the most opportunity in terms of those two parts of the market when it comes to market share gains?

Ian Lowitt

I mean, I suspect that the market share gains are going to be more associated with sort of winning mandates with larger clients, which is not to say that we don't look to add sort of midsized clients. But I think that as I sort of reflect on who it is that are coming on to the platform, I think we're gaining share with small and midsized clients. But I think that what's distinctive at the moment is some of those larger clients coming on to the platform, and that's probably the bigger driver of share. So it's not to say that the other isn't. It's just to say that I think that it's the larger clients coming on to the platform that will be driving the market share.

Patrick Moley

Okay. Great. And then just as a follow-up it was a great quarter, not much to nitpick. But if I was going to pick one, I think it would be in the Market Making segment, particularly in the metals market making. It looks like revenues dropped off pretty significantly there. So just wondering, I understand that there was some elevated activity around the middle of the year. But what drove the weak fourth quarter? And how should we think about kind of a normalized level as we head into 2025?

Ian Lowitt

Yes. I mean, Rob, why don't you take that?

Rob Irvin

Okay. Why don't I start. So when you look at the performance versus the second and third quarter, we saw significantly lower levels of volatility in the market after really strong levels of activity in the first part of the year. And when you look at the fourth quarter versus the fourth quarter of last year, we recorded a fair value adjustment to reflect the open risk positions at year-end, which we hold to service client demand compared to an immaterial adjustment in the prior year.

Ian Lowitt

So I think it's less a sort of indication of sort of underperformance in the business and more a function of almost sort of technical accounting that drives that particular number, Carl.

Patrick Moley

All right. Yes. Great. Well, congrats on a strong quarter. That's it for me, guys.

Operator

Kyle Voigt, KBW.

Kyle Voigt

Good morning, everyone. Maybe a question on the margin profile of the business. Obviously, you're able to deliver 20% margins, adjusted margins in 2024. Maybe there are some puts and takes with that. You had some benefits there from a stronger year overall from Market Making. I'm just wondering if you can if you think you can continue to expand margins in 2025 off of the 2024 base?
And within that, I think Agency and Execution, specifically has been a big driver of that margin expansion. Margins are up 300 basis points year-on-year for the full year. Maybe you can also just comment how you feel about being able to drive additional operating leverage in that business as you're going to look into '25?

Ian Lowitt

Yes. Look, I mean, I think it's a great question. We've I mean here are sort of the components of it. I mean obviously, as we grow, we would expect to see some amount of operating leverage. We, it depends a little on sort of how you grow.
And as you grow in a diversified way, you tend to add new products or new capabilities and new geographies. And if you're in that circumstance, you typically have to do quite a lot of investment in your support and control areas to ensure you're growing in a safe way.
If you're growing through increasing scale and existing activities, then you are going to see some returns to scale. But I think that what you've seen and what you should anticipate is we're going to continue to make investments in our support and control infrastructure in a way to ensure that even as we grow, we are going to be able to do that in a very controlled way.
Most of our competition cost is sort of very variable. And so again, as we grow, we would expect that cost to continue to move. But there will be some returns to scale. And when we think about the level of investment that we operate with, I think over some period of time, that normalizes out.
So the combination of all those things, I think when I pin the spot where we would expect margin expansion, you should not expect it to be dramatic, but which you should expect, and we would hold ourselves to some slow margin expansion as we continue to grow.
And I think exactly as you've identified, the place where I expect that margin expansion to occur will be in the Agency and Execution space in capital markets, in particular, where we're seeing the benefits of sort of restructuring where there have been a series of acquisitions and we needed to integrate those effectively into the platform where there's sort of contract restructuring, things of that kind. And so we believe that will continue to be an area where our margins will continue to expand.

Kyle Voigt

That's great. And just for a follow-up, if I can just reference Slide 16, the capital requirement that's on that chart there of $309 million, it stepped up from $235 million that was shown as of last quarter. Can you just give a bit more color as to what drove that? I wasn't sure if that kind of gets reevaluated once per year. And then also, can you just remind us, as TD Cowen and the prime business kind of scales up, how does that impact that the capital requirement?

Rob Irvin

So you're totally right, Kyle. We reevaluate it on an annual basis. The firm has got bigger over the course of sort of '23, '24, and the step-up in capital requirement reflects that.

Paolo Tonucci

Back to that comment, the (inaudible) --

Kyle Voigt

Just a heads up. We can't really hear Paolo, if he's speaking, keeps cutting out.

Paolo Tonucci

Sorry, Kyle. I was just saying that in relation to the second part of your question about the prime services business, it's relatively low capital intensity. So the impact of that business growing has been quite limited in terms of the capital requirement. The client activity is quite low leverage, and it uses relatively little balance sheet.

Operator

(Operator instructions)
Dan Fannon, Jefferies.

Hi, thanks for taking my question. This is [Jun] on behalf of Dan. Could you maybe just provide us with some thoughts on your M&A strategy going forward? The last deal was struck almost five months ago. And so just looking ahead, are there any specific product capabilities or maybe geographic coverage that you might be focusing on? Thanks.

Ian Lowitt

Look, I think that we're as we've sort of described, we're looking at a number of things. I think so the broad theme here is there's a number of sellers, a limited number of buyers. And what that does is it throws off a lot of opportunities sort of for us. And then as you sort of described, we look at things that add capabilities and add sort of regional coverage.
I don't think there's anything specific that I would want to call out at this point, but I can say that we have an extremely active pipeline. It includes potential acquisitions in a number of different geographies. It includes things that are across a number of our businesses. And broadly, we look for things that are across all of our segments. So we're not just focusing on one.
So we're seeing opportunities in Clearing, we're seeing opportunities in Agency and Execution, we're seeing opportunities in Market Making, and we're evaluating all of those sorts of for fit. And we'll be in a position to announce them if and when we get them to a point where we're in a position to sort of find an SBA. I don't know what you'd add to that, Paolo?

Paolo Tonucci

Yes. There's been no slowdown in activity. I mean these things, are by their nature, are going to be somewhat unpredictable in terms of signing and closing dates, but we've been very active.

Okay. And then as a quick follow-up, the fixed investments that was repriced higher, are there any more tailwind to yields from that sort of fixed repricing to come?

Rob Irvin

No. So this was a bunch of US treasuries that we had invested in sort of '22, which created a little bit of tailwind, so a bit of headwind as we went into '23. As those rolled off, we reinvested them at a higher rate. You can see when you look at the return the yield return in the fourth quarter, we're much closer to Fed funds than we have been historically, and that's the benefit of those reinvestments.

Operator

(Operator instructions)
Alexander Blostein, Goldman Sachs.

Hi, good morning, everyone. This is Anthony on for Alex. I wanted to get a sense on your view of the current market environment, given the volatility in a lot of areas you compete in. What has been your experience in previous periods of market volatility in terms of both market share and client behavior?

Ian Lowitt

Look, I think that this is it is an attractive market for Marex. We're seeing higher levels of volatility across pretty much every asset class. We're seeing higher levels of sort of client activity because it's sort of more difficult for people to anticipate exactly where things are going to go in a variety of different views that is affecting the level of activity of clients.
Interest rates, at least for now, seem are still sort of quite high, obviously lower than the levels that we experienced last year, but they're quite high. So as a sort of general matter, this is an attractive market for Marex. I mean it's not disruptive in the way that we saw for the cohort quarter or for the Ukraine invasion quarter. So we're not seeing those kinds of dislocations.
It's just a sort of general elevated level of volumes and a generally elevated level of volatility that's playing out across all our segments and all asset classes. So that's an attractive sort of environment for firms like ours. And I think we're a firm that's built to take advantage of those opportunities.

Paolo Tonucci

And just to add to that, because I think some of this in the execution space is clearer. But certainly, it's it sort of helped with the level of activity. But as you see the growth in market share, that's driven by adding clients by adding sort of capabilities, by adding products and by adding people. So a lot of what we see in terms of increase in the agency and execution space is actually not just the benefits of more volatile markets, but the fact that we've added people and products.

Great. That's helpful. And maybe just a follow-up on M&A. What are your expectations on the pace of M&A in 2025 and whether you'd pursue large-scale M&A, opposed to bolt-ons?

Paolo Tonucci

It's a very good question and quite difficult to answer that because there are a mix actually of bolt-ons and slightly larger, more transformative opportunities that we're assessing. I mean the majority of what we will do will be just because it's more quickly absorbable will be of the nature of Aarna Capital, so a 35-to-40-person team, albeit in a very attractive space. So I think it will be by number, more weighted towards bolt-ons.
As we sort of talked about before, our cadence has been somewhere around four, five transactions a year, and I would expect that, that it's difficult to do more than that. And but we will look to achieve something like that over the course of the year. And if we the more transformative transactions typically are a little bit less predictable in terms of when they come and how they progress. But there are more transformative opportunities that we're currently looking at.

Great, that's helpful.

Operator

(Operator instructions)
Carlos Gomez-Lopez, HSBC.

Carlos Gomez-Lopez

Hello and good morning. Thank you for taking my question. So I would like to know, you mentioned how you continue to do market share against banks and smaller companies. Given that we are now in a new regulatory environment, let's say, in the US and the bank seems to be and less scrutiny, less pressure than they have been in the past, do you foresee any change in that competitive environment going forward? Second, could you give us some guidance about your tax rate in 2025?
Thank you so much.

Ian Lowitt

Sure. So with regard to sort of the first question, I think that it's obviously one that we've thought about a fair amount and also sort of quite attentive to. I guess my sort of preliminary view on this, which is borne out by existing experiences to the extent that US banks are feeling that they can sort of take on more, it's unlikely that the way in which they're going to choose to do that is to expand out into the set of services that we provide.
I mean, if you decide that you want to get bigger in clearing, that's more a matter of investing in your systems, sort of updating how you're engaging with exchanges. Some kind of long client acquisition process, you don't get returns for some period of time.
And if your alternative is to allocate more capital, not to clearing, but to allocate that capital to trading opportunities or lending opportunities, I think it's more likely that banks are going to choose to go down there for us rather than try to build out businesses like clearing, which they've been deemphasizing in one form or another for a while.
And similarly, agency and execution, building that out when you've been retreating from it for a while and you've done that for reasons that consistent with your strategy, it's not obvious to me that they're going to reverse that. So I think you're probably right that banks will, particularly in the US, be more ambitious. They'll have a different way in which rig capital is potentially assessed against various risks. Regulations may be applied in a sort of differential way.
But I think it's much, much more likely that the way they respond to that is by increasing the amount of trading they do and the amount of lending they do than anything else. And broadly, if they increase their level of trading, they become potential clients for us, and many of our largest clients are the largest financial institutions in the US who look to us to help them gain sort of access to market and market liquidity.
So that's certainly the way it appears to be playing out at the moment. I mean, obviously, one never knows, and you don't know what's going on within each institution. But that certainly feels to us to be the way that it's likely that the banks respond and it's consistent with our current experience. With regard to tax rate, why don't you take that on, Rob?

Rob Irvin

Thanks, Ian. So, our tax rate in 2024 was 26.3%, it's exactly where we expected it to come in. It's down versus '23, primarily due to the decrease in the number of nontax deductible items. Where I'd expect it to go going forward, I expect it to be between 25% and 26%, but it will depend a little bit upon the geographical split of profits each year.

Carlos Gomez-Lopez

Very clear. Thank you and look forward to seeing you in New York.

Ian Lowitt

Thank you very much, thank.

Operator

Thank you. We have no further questions at this time. I would like to hand back to you for closing remarks.

Ian Lowitt

Well, thank you all for joining the call. I mean obviously, we're very proud of what we accomplished in our first year as a public company. We're proud of what we did in the fourth quarter and what we delivered in 2024. And I think as you hopefully got a sense from our response to many of your questions, we're very excited about 2025. We've had a strong start to the year.
The market environment is certainly one that is supportive for our particular services, and we certainly are seeing a great deal of sort of engagement with our clients.
So obviously, still early days with regard to the year, but it's certainly been a very good start to the year. And we look forward to engaging with some of you at our Investor Day. I mean, as we indicated in the remarks, it's really an opportunity to get to know our management team a little bit better for us to go into our businesses.
There's no big change in strategy. There's no big reveal, but it is an opportunity for us to engage with investors and analysts and have you understand Marex to an even greater extent than what you currently do. So thank you for your attention and engagement and questions, and we look forward to seeing you all over the course of 2025.