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Last year, XTX Markets achieved a record profit of £1.1bn through its UK entities, solidifying its position as a leading player in the global financial market.
According to filings at Companies House viewed by the Financial Times, the London-based company experienced a 64% increase in profits in 2022 compared to the previous year. XTX capitalised on market volatility resulting from evolving expectations for central bank policies worldwide, significant interest rate hikes, and the commodity market fluctuations following Russia’s invasion of Ukraine.
XTX has emerged as one of the largest proprietary trading and market-making firms globally, elevating its founder, Alexander Gerko, a mathematician and former Deutsche Bank trader, to one of the wealthiest individuals in the UK.
The market maker witnessed a staggering 68% rise in revenues, surging from £1.5bn in 2021 to £2.5bn in 2022. These figures encompass earnings from XTX’s three UK entities, which encompass their trading, technology, and markets divisions.
Companies House has already published two of the three sets of filings, which align with the figures reported by the Financial Times.
Despite a challenging period for the UK equity market and many finance companies relying on it, XTX managed to deliver strong performance while operating globally.
XTX, a private firm employing over 190 individuals worldwide, relies on algorithmic trading rather than human traders. Their algorithms capitalize on market price disparities across various platforms.
The company competes with industry giants such as Ken Griffin’s Citadel Securities and New York-based Virtu Financial, conducting approximately $250bn worth of daily trades involving equities, fixed income, and other assets. Virtu Financial reported a net profit of $468mn last year, while Citadel Securities achieved revenue of $7.5bn, as reported by Bloomberg. Market makers typically thrive in volatile markets.
Gerto, the majority owner of XTX, holds a 75% stake in the group. As a British citizen, Gerto, originally from Russia, ranks as the 15th wealthiest individual in the UK. The Sunday Times revealed that he was the highest individual taxpayer in the country last year, with a payment of £487mn. Gerto renounced his Russian citizenship in late 2021 and publicly condemned Moscow’s invasion of Ukraine.
Furthermore, XTX filed a lawsuit against accounting firm Mazars last year, alleging racial discrimination after Mazars refused to work with the trading house due to Gerto’s Russian citizenship. The claim states that Gerto has no ties or financial connections to Russia. Mazars declined to comment on the matter.
Earlier this year, XTX appointed former JPMorgan executive Hans Buehler as co-chief executive alongside Gerto.
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