MFT ENERGY: Global Visions for Unique Trading Model

MFT Energy trades power and gas on energy exchanges and facilitates efficient markets, and while its primary business has historically been focused on short term power trading in Europe, taking advantage of the many lucrative opportunities in highly volatile markets driven by renewables, the last 18 months have seen a gradual move outside of Europe, taking in the US and Asia and introducing offices in Istanbul, Athens, and Singapore.

MFT Energy has always vowed to embrace new ways of thinking and operating, and this is most clearly evidenced in the company’s shift away from the traditional command-and-control paradigm, instead allowing highly driven professionals to choose their own best methods and govern their own business model and investments.

“This provides trading teams, and MFT Energy as a whole, with a compelling and enduring competitive edge,” says COO and Partner Bo Palmgren. “At MFT Energy, we are experts in trading power and natural gas on energy exchanges. We match the interests of market supply and demand and contribute actively to price determination and price security.” Partners also have recourse, whenever needed, to a dynamic hub of subject matter expertise in the likes of support functions, access to capital and markets, strategic and entrepreneurial leadership as well as IT, risk advisory, and legal services.

MODEL LIKE NO OTHER

This is a distinctive design, and one wherein traders and market analysts are supported by a seasoned leadership team, innovative software developers and business intelligence specialists, Palmgren sets out. “This partnership model is what really differentiates us from some of our counterparts,” he states, “utilising the latest technologies, building a strong scalable trading platform, and offering the possibility for all employees to become Partners. It is a simple model, but even so, no one else before us had dared to sell off the ownership in the same way that we do.

“We provide the infrastructure and the market access, and then empower traders to be the best within their markets. This approach has enabled us to attract some exceptionally talented people who are ordinarily difficult to attract, as this was the one thing that they were lacking: ownership. Many experienced, ambitious and proven individuals were enthused to come onboard, and this really provided the starting point of MFT Energy’s true sustained growth.

“We believe that the most successful way to create an extraordinary company,” Palmgren condenses, “is to equip talented people with the right tools and a sense of ownership.” The benefits of this one-of-a-kind model are mutual, he continues. “It empowers entrepreneurial traders to become the best, in turn accelerating skillsets, business development, and an ever-stronger pool of talent.

“We have a fantastic business model based on creating partnerships with skilled traders who have a niche trading idea and a good business plan.”

Not only are the traders owners according to this structure, Palmgren clarifies, but in fact 50% of all employees at MFT Energy, with the remainder on track to achieve the same per the company’s grand ambition. “The central facet underpinning our desire to do business like this,” Palmgren continues, “is the unbending belief on the part of us founders that it creates the right culture within an enterprise, and especially a trading company. It invokes a sense of urgency, and the competitive spirit that we so desire, and it means that every one of us is prepared to run an extra mile when things get tough.

“All of these, we think, are vital aspects of a trading house, and in my opinion, we have forged an ethos which is very strong and highly ambitious, and which draws in a certain type of person. Although only five years old, we are developing and strengthening quickly and our ambition now is to build the most scalable global energy trading hub, connecting talented people around the world and unlock their full potential within energy trading.”

DRIVERS FOR GROWTH

On welcoming incumbent CEO Torben Nordal Clausen in May 2020, the intention to IPO was unveiled, when after three satisfying start-up years, the company declared itself ready to embark on the next journey to further accelerate growth.

“The current size of MFT Energy and my experience with growth is a perfect match,” Clausen expressed at the time. “We are in a situation with a sizeable organisation and the financial resources to target our vision – both regarding the business opportunities and in respect of creating the optimum foundation for the employee’s growth – as professionals and as people.

“Our partnership model ensures that every employee is offered an exciting growth journey and an opportunity to be a co-owner,” he elaborated. “The feeling that we are on the same mission and can develop and celebrate together excites me.”

MFT Energy has continued its significantly investments into the business platform and subsequently developed the organisation, empowering and motivating everyone involved in the company. “It is a development that suits our business model very well,” Palmgren agrees, “as having a share price or public valuation enables us to always know what the price of MFT Energy is.”

The MFT Energy business and partnership model has paved the way for rapid, sustained growth, the ideal foundation for its lofty future ambitions. Its growth strategy sets out clearly defined targets, firstly building a firm base through investments in group services and business support functions and creating the fundamentals needed to execute and initiate an accelerated growth strategy.

“The positive impact from the many investments in 2020 will be leveraged even more in 2021 and 2022 to accelerate our growth,” the company commented. “We call this part of the strategy ‘Growing the Business,’ and our key focus areas will be further market penetration through an expansion of all our existing teams and our international presence.

“Strengthening our European market positions within both Power and Gas as well as further international expansion is our top priority, while recruiting and retaining highly-skilled colleagues with the right experience is a key driver for our further development and growth.” This careful plotting resulted in enormously strong growth in 2020 and a revenue increase of 297%, to €461m, while EBIT also swelled to €7.8m, representing a 253% rise.

The major changes which continue to take place in global energy markets have proved strong underlying growth drivers, Palmgren says, and present significant further opportunities for well-positioned energy traders like MFT Energy. “The global energy markets continue their transformation, driven by renewable energy and further decarbonisation initiatives,” he posits.

“The implementation of renewables lads to a better world, obviously, but it also brings uncertainty to the market. MFT Energy’s trading teams have in-depth knowledge of the supply and demand dynamics in their respective markets and region to benefit greatly from the resultant price fluctuations and volatility.

“We are ready to utilise our trading and market knowledge in the great transformation towards more renewable energy, which is one of the biggest market drivers,” Palmgren wraps up. “We know that as more and more countries embrace renewables, we will be able to tap into that, and as renewables go global, so will we. Our investments in our platform have made us very well positioned for these increasing market challenges and opportunities, and above all, we aim to leave the world a little bit better than the one we entered.”