CITADEL Securities chief executive officer Zhao Peng said the market maker is running at a “record pace” as it benefits from its expansion into new products and geographies.
“We had a very strong first quarter and year-to-date we are running at a record pace,” Zhao said on Thursday (May 9). That growth is a reflection of the trading giant’s existing businesses as well as its newer product offerings, he said.
Founded by billionaire Ken Griffin, Citadel Securities matches buyers and sellers in the equity and fixed-income markets. The trading firm generated about US$7.5 billion in revenue in 2022, using algorithms to capture and profit from tiny differences in prices. The firm serves asset managers, banks, broker-dealers, hedge funds, government agencies and public pension programmes.
“This year both the first quarter and the year to date are at historical highs,” Zhao said. “If you take our prior quarterly and annual run-rate numbers and add some growth on top of that you are going to be in the right ball park.”
The firm came into prominence in the era of meme stocks, and is responsible for about a third of all US retail stock trades. It’s ramping up its presence across fixed income beyond interest-rate swaps and Treasuries to serve institutional investors in corporate debt trading, starting with investment grade bonds.
Zhao said that the market opportunity for firms such as Citadel Securities is growing at a rapid and sustainable rate.
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“This time it’s not happening because of a global pandemic or war breaking out somewhere,” he said. “This does feel like a new strong trend line that’s more longer term.”
Zhao also weighed in on the recent US ban on non-compete clauses that prevent staff from jumping to rival firms. The measure puts a firm’s leadership position at risk in the battle for talent, he added. BLOOMBERG
