Posted on Dec. 2020 at 6:48
Rise in volumes, volatility… 2020 was a key year for the big American trading firms, apart from a few accidents. Among them, Citadel Securities, owned by Ken Griffin, the founder of the hedge fund Citadel has just celebrated his 30th birthday. This year, its multi-strategy fund is leading the way with a gain of 21.2% over the first 11 months of 2020.
Separate from the $ 35 billion hedge fund, Citadel Securities, the leader in stock trading in the United States, wants to increase its global presence beyond the highly competitive American market. Already present in London, it will accelerate on the bond markets in Asia (China, Japan, etc.) and gain a foothold in Continental Europe next year after obtaining regulatory green lights.
France, rate country
The trading firm chose Paris. France is a country where rate management is highly developed. The ecosystem there is extremely rich, both for managers and bond investors. “It’s a logical center for fixed income activities. We are going to recruit sellers first. Having a presence in Paris will allow us to increase our European clientele. We will continue to target the large management companies and central banks which are major investors in US Treasury securities (Editor’s note: US public debt) ”, explains Paul Hamill head of distribution on interest rate products at Citadel Securities.
The firm plans to embark on “market making” on bonds in Europe. It provides liquidity by buying or selling the instruments that investors want to buy or sell. She does not speculate for her own account by betting on the direction of rates. “We want to develop in Europe on dollar instruments but also on the euro swaps market (euro swaps)”, emphasizes Paul Hamill.
Technology and liquidity
Launched in Chicago in 2002, the trading firm will also strengthen its diversification of bond products in the United States. “We are going to extend our offer to bonds indexed on inflation and stripped bonds (Editor’s note: bonds split into several securities). 2020 has been a very good year for us in terms of market share and volume gains. We aim to be in the top 3 for “US Treasuries” ”, says Paul Hamill.
Citadel Securities does not consider itself to be a traditional high-frequency (high-speed trading machine) trading firm. On bonds, a very high speed “Is not the decisive factor of success, it is the resilience and robustness of our technology and our rating system”. This year, “We provided liquidity to our clients even during times of significant market stress in March”. The firm has 1,400 institutional clients for its bond activities and intends to further expand its client base.