There’s a new player in the currency exchange business and it’s hitting the ground running as Victoria-based EncoreFX opens its doors across Canada backed by the founder of Custom House Currency Exchange.
Peter Gustavson, who founded Custom House in 1992 and sold it to Western Union in 2009 for $370 million, has partnered with former Custom House executive Paul Lennox to open EncoreFX in five locations plus a Victoria administration office at 517 Fort St.
“The first time we did this we had very little money and no experience in the industry. We had to make this up on the fly. This time we start with a significant balance sheet and decades and decades of experience in the industry,” Gustavson said in an interview. “It was a lot of fun the first time. It will be a lot of fun with the money, experience and tons of connections around the globe.”
The firm has opened offices in Vancouver, Calgary, Edmonton, Saskatoon and Ottawa with plans for aggressive expansion.
Lennox, EncoreFX’s president, said they currently have 30 employees, but expect that number to double before the end of the year. He expects the firm will have completed $2 billion in foreign exchange transactions this year.
The optimistic outlook is based on experience, said Gustavson, noting the industry has changed since he and Lennox signed five-year non-compete agreements after the sale.
Gustavson also said that change has not been for the better. “What made us successful as a company was our focus on customer service — whatever the customer wanted we would move mountains to make sure it happened,” he said. “Now it’s become ‘these are the products we have, take it or leave it.’ I think we have a good understanding of what the customer values and what we can do to improve upon the products that are out there.”
At this point, the majority of employees are former Custom House workers.
Lennox said getting the right people has been “surprisingly easy. We’ve recruited a few people, but most have reached out to us when word got out we were back at this,” he said. “It’s not just former colleagues from Custom House, but people from other firms and the banking community.”
Lennox said they expect quality will gravitate to them because they intend to adopt an old-school, professional, customer-oriented approach. “We are being a bit disruptive, I guess, but we really want to be professionals,” he said.
Gustavson said he had no intention of being in the foreign exchange game after selling his company, but pressure from colleagues and a bit of a bad taste in his mouth the way Western Union cut back the business helped steer him back.
Gustavson was disappointed by the way Western Union cut the Victoria office and outsourced work to places including the Philippines.
When he sold it, Custom House was one of the world’s largest non-bank foreign exchange companies with customers in
115 countries and more than $35 billion in transactions.
After selling, Gustavson donated $10 million to the University of Victoria, where the business school is now named in his honour.