Citadel Securities expands in Asia with big hires, block trades

[HONG KONG] Citadel Securities is expanding in Asia by recruiting a string of high profile hires and plans to bring its so-called “high-touch” equities business to the region.

Ken Griffin’s market maker recently named former Millennium India CEO Prakash Subramanian K V as country head of India and Singapore, the company said.

In addition, Citadel Securities is seeking to expand its high-touch equities business in Asia after it launched in the US this year, according to president Jim Esposito. The firm is leveraging its existing strength in electronic execution to “capture much more of the large, concentrated flows” through value-added services and relationship management, he said.

Citadel Securities has been intensifying competition with Wall Street firms through its expansion into equity block trades. Its high-touch business, launched in 2016, also supports rates, options and credit, contending with traditional brokers on complex, non-routine trades. The firm uses its proprietary data and analytics to help clients make better decisions.

Traditionally, electronic market makers such as Citadel Securities specialise in “low-touch” systems – algorithmic programmes that buy and sell at lightning speeds without much human involvement. The profit on every trade is tiny but volumes are high, with retail investor orders usually coming via a broker. With this model, Griffin’s firm has become a giant of the US stock market, executing about 35 per cent of individual investor trades and 24 per cent of all equity orders.

In contrast, a “high-touch” business handles fewer but much larger trades. Orders usually come directly from clients, and frequently require human intervention to keep costs down and minimise market impact. It’s a different skill-set and far more labour intensive, but there’s money to be made. A Bloomberg Intelligence analysis showed that high-touch trading desks account for 55 per cent of all equity broker fees.

Senior roles

Citadel Securities’ expansion has pushed its headcount in Asia to more than 300, covering more than 10 markets, up from some 200 people in 2022.

Subramanian will drive the firm’s business in India and Singapore, while engaging with local stakeholders, including regulators, according to the company. He will report to the Head of Apac Vikesh Kotecha.

“We look at growth opportunities in the Apac region in two dimensions, products and markets, and we are making significant investments in both,” Kotecha said.

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The company is bringing market making for US investment-grade credit to Asia. It hired former Royal Bank of Canada alum Redha Achour as head of credit trading for Apac.

It’s also created more senior positions in Asia. Savio Joseph, head of Apac equity and equity derivatives sales, has been working with fixed income heads, Shinichiro Kato in Japan and Kelly Wang in Hong Kong, to bring US equities and options offerings to Apac in the past few months.

Since taking on the role of global head of structured products, Richard Smerin has been based in Hong Kong, building out a new business that draws on Citadel Securities’ pricing capabilities and works with banks on pricing and risk transfer. BLOOMBERG