KCG Holdings chief executive Daniel Coleman is constantly on the lookout for ways to leverage technology. Since July 2013, when Jersey City, New Jerseybased KCG was formed through the merger of Chicago-based high frequency trading pioneer Getco (where he had been CEO) and troubled broker-dealer Knight Capital Group, Coleman has been selling off his companys less tech-focused operations. KCG announced in February that Citadel Securities was buying its New York Stock Exchange designated market-making (DMM) business. The sale of the DMM was the final step to where we are very much a technology-driven firm, says Coleman, who turns 52 in August and worked at UBS and predecessor firms for more than two decades before joining Getco in 2010. We still have some businesses that require over-the-phone conversations with clients, but even with those most of the order flow comes in via technology. During the past year Coleman has been hoarding chief technology officers, starting with the hiring last summer of REDI Holdings CTO Josh Schubkegel. In December he brought back Michael Blum, who headed Getco Execution Services from 2009 to 2012 before leaving to become CTO of Chicago-based hedge fund firm Teza Technologies. In March, Coleman recruited Brian Freyburger, who was CTO of high frequency trading firm Tower Research Capital. Schubkegel and Blum are both working on client-facing technologies; Freyburger is rebuilding KCGs core market-making system. Weve given Brian and his team the luxury of building from scratch something that will be a next-generation trading system, says Coleman, an Alabama native who commutes weekly from Birmingham to KCGs offices in New York and Jersey City. To some extent, Mike is doing the same thing on the client-facing side. KCG, which is listed on the NYSE, has profited from this years increased market volatility. In the first quarter its U.S. equity market-making revenue grew 22 percent year over year and its BondPoint trading venue set a quarterly record, with average daily fixed-income par value increasing 32 percent.
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