04.20.2013
By Terry Flanagan

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.”

Stuart Breslow, managing director, Citadel Technology

Stuart Breslow, managing director, Citadel Technology

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.

 

Related articles

  1. Algorithms have become more prevalent in the spot FX market.

  2. Congress Unlikely to Act on HFT

    QB’s Algo Suite for futures market trade execution is also being co-located to HKEX.

  3. Breaking data silos is key to deploying automation beyond 'nuisance' orders.

  4. They can be used on quantum hardware expected to be available in 5 to 10 years.

  5. Regulation and Liquidity Top Concerns in Fixed income

    Streaming blocks change the basis of matching and price discovery so institutions can find new liquidity.