Citadel Carves Out Technology Niche
When fledgling hedge funds need assistance, who better to turn to than an elite hedge fund?
Citadel Technology, a wholly-owned subsidiary of Citadel, is intent on becoming as much of a household name within the asset management software space as its parent company has become within the investment community.
“Citadel is known for its technology capabilities,” said Stuart Breslow, managing director at Citadel Technology. “We are focused on understanding technology and how it can accelerate growth.”
Indeed, Kenneth Griffin, founder of Citadel, launched his investing career while still a Harvard undergraduate, coaxing the school administration into allowing him to install a satellite dish on the roof of Cabot House to receive stock quotes, according to a 2011 profile in Chicago Magazine.
Griffin’s earliest investment strategy took advantage of a systematic inefficiency in the market for convertible bonds, which are company bonds that can be converted into stock, the magazine said.
“Technology is in the DNA of the firm,” said Breslow.
Citadel Technology formed in 2009, is an independently operated, separate technology licensing and services company that is part of the Citadel family of companies. “We have a track record of providing superior technology to a wide range of clients, including asset managers, sovereign wealth funds, hedge funds, pension funds, hedge fund administrators, and prime brokers,” said Breslow.
Breslow himself is well-schooled in the nuances of technology, having served as chief technology officer and CEO at RealTick, which is now owned by Eze Software Group.
Breslow, who joined Citadel Technology in September 2012, is seeking to leverage the in-house technology expertise built up by the asset management and execution businesses of the parent Citadel, and license it to a range of buy side institutions.
“We serve a full spectrum of the market,” he said. “We can provide a fully integrated enterprise investment management platform or components to fill a specific need.”
The largest number of potential prospects is start-up companies. “In many cases, start-up funds are less than $100 million and are in need of an OMS [order management system] system to do trade entry and basic P&L,” Breslow said. “Our solution is appropriate to startup situations, but easily scales to large prospective clients that have outgrown their system, and need multi-asset, multi-strategy platforms.”
Citadel Technology’s value proposition centers on integrated order, execution, trade management, and portfolio management functionality.
“Our systems are capable to work in all asset types, with workflow processes that allow a portfolio manager to get a trade done, send it to a trader who works the market, and then post trade through to the back office,” Breslow said.
Citadel Technology has embraced managed services, as have many of its customers.
New algorithms use quantitative approach to execution.
The volume grew by 41% in the second quarter of 2019.
The JavaFX-based interface now runs across a greater number of platforms.
The new offering sports 11 liquidity-seeking algorithms with more to come.
GMAG says vacation season is a good time for design, implementation and testing of machine-based trading.