Wednesday 18 July 2018

Profits at Virtu's Irish arm hit €16m

Specialist traders work at a Virtu Financial booth on the floor of the New York Stock Exchange. Photo: Reuters
Specialist traders work at a Virtu Financial booth on the floor of the New York Stock Exchange. Photo: Reuters
John Mulligan

John Mulligan

Profits at Virtu Financial Ireland - the Dublin-based arm of the high-speed trading firm - last year soared to €16m from €6.2m, despite turnover at the group falling 20pc.

Accounts for the company - which moved its operations to Ireland from London in 2013 with support from the IDA - saw its net trading revenue fall to €57.6m in 2016 from €70.6m a year earlier.

One of the world's top high-speed trading firms, Virtu employs close to 30 people at its Dublin operation. The average pay, excluding that of directors, is more than €250,000 a year. Directors at the Irish unit include former finance minister Charlie McCreevy.

Virtu was co-founded by Vincent Viola, a former chairman of Nymex (the New York Mercantile Exchange) in 2008 and a former officer in the US army's Airborne Division. Last year, he was nominated as Army Secretary by US President Donald Trump, but later withdrew from the running.

Virtu, whose chief executive is Doug Cifu, provides liquidity in more than 12,000 instruments at more than 235 venues and markets. It facilitates rapid, automated transactions on stock markets, taking a tiny slice of each transaction.

The accounts for Virtu Financial Ireland state that it focuses its business on proprietary trading and liquidity provision services in financial instruments, including equities, derivatives and commodities in European venues.

The accounts also show that gross trading income totalled €116.3m last year, compared to €128.7m in 2015.

Brokerage, exchange and clearance fees hit €51.2m last year - compared to €49m in the previous period. Related party service fees fell to €24.9m from €46.9m. It had total current assets of €807.1m at the end of 2016, which included €658.4m of assets held for trading. Earlier this year, Virtu Financial acquired rival KCG for $1.4bn.

In an interview this week with the 'Financial Times', Mr Cifu said that a slowdown in equity volumes and volatility in financial markets had negatively impacted firms such as Virtu.

"With less volume, there is less opportunity to make money from trading," he said. He said this typically means tighter net profits for market maker firms.

Virtu wrote earlier this year to the US Securities and Exchange Commission in support of trading in bitcoin.

"With innovative use cases emerging for bitcoin and for the associated technology of blockchain each passing day, we believe that investors seeking exposure to bitcoin... should have similar options as are presently available for physical bullion," Mr Cifu told the regulator.

Irish Independent

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