UK trading firm XTX consolidates market position with record profits

XTX Markets made a record profit last year, solidifying the UK trading firm’s position at the heart of financial markets and generating a multimillion pound payout for owner Alexander Gerko.

London-based XTX made £667mn in net profits in 2021, a record for the six year old company, compared with £470mn in 2020 as it benefited from turbulent, pandemic-hit markets, according to figures seen by the Financial Times that have been filed at Companies House.

The figures represent earnings from XTX’s UK entities, which includes its markets division.

The company, founded by Russia-born mathematician Gerko, who has a 75 per cent stake in the group, has elbowed some of the biggest investment banks aside to establish itself as one of the world’s leading proprietary traders and market makers.

The group trades nearly $300bn a day in assets such as equities, fixed income and futures. It is also one of the top five traders in the world of currencies, by market share, and nearly a fifth of European equities trading.

The profits were earned from revenues of £1.48bn ($1.79bn) across its markets, trading and technology divisions, a 38 per cent increase from 2020, when the company had revenues of £1.06bn.

Gerko’s company is a computerised trading group that relies on mathematical algorithms to make money from tiny differences in market prices.

The group, which employs 171 people in New York, Paris, Mumbai and Singapore but does not use human traders, was helped by shifting expectations for US central bank policy on interest rates and inflation.

This created opportunities for profits in volatile markets for XTX and other algorithmic traders such as Ken Griffin’s Citadel Securities, which posted revenues of more than $7bn in 2021, and Jane Street, which managed to surpass $10bn in earnings in the 12 months to March last year.

Gerko is a UK citizen who was listed as the 187th richest person by the Times last year, which estimated his wealth at £875mn, more than double the previous year’s figure.

The Sunday Times also named Gerko as one of the UK’s top taxpayers, contributing £117.4mn in taxes in the year ending April 2021.

In addition, Gerko has established XTX as a charitable donor that has given more than £60mn since 2017 to various causes, making the company one of the top three corporate foundations in the UK.

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