After yet another record-shattering year, executives of the fixed-income trading, data, and posttrade services provider MarketAxess Holdings aren't conceding any limits to the company's growth potential or the power of its technology. In business since 2000, publicly held since 2004, and with Nick Themelis as chief information officer since 2005, MarketAxess' electronic platform claimed a 17.2 percent share of U.S. high-grade corporate bond trading in 2016's fourth quarter, up from 15.1 percent a year earlier. Its total global, full-year trading volume of $1.3 trillion was 33.7 percent higher than in 2015, while revenue climbed 22 percent to $369.9 million, and pretax income rose 29.5 percent to $191 million.
Helping to fuel that success, and accounting for 13 percent of trading volume, is one of the most talked about bond market innovations: the Open Trading protocol, which MarketAxess introduced in 2012 and is currently approaching $1 billion in daily volume after 86 percent growth last year. "Open Trading was a response to the market's liquidity problems," Themelis, 53, explains. "We connect every point of liquidity," buy-side and sell-side, in a so-called all-to-all trading pool that in 2016 saved liquidity takers an estimated $100 million-plus in transaction costs.
Themelis, a former Barclays Capital CIO for North America and global head of fixed-income technology, believes it will be hard for a competitor to match MarketAxess' first-mover advantage, notably its connected community of more than 1,100 buy- and sell-side participants that is responsible for Open Trading's momentum. Those users are requesting that the protocol be extended into municipal bonds and other asset classes.
The 2017 Trading Tech 40Click below to view profiles