In July, OpenDoor Trading raised $10 million in capital on top of an earlier angel round of $2 million and declared itself the first woman-owned bond trading platform. The founder and CEO, Susan Estes, is a 30-plus-year veteran of the fixed-income markets who has run trading desks at Morgan Stanley and Deutsche Bank. She and co-founder Brian Meehan hatched the idea three years ago for an all-to-all trading platform that would address liquidity and cost issues in the market for off-the-run U.S. Treasuries and Treasury Inflation-Protected Securities. Having called attention to these issues for years one venue being the Treasury Borrowing Advisory Committee, on which she served under Treasury Secretaries John Snow and Henry Paulson Estes says of her market-building effort, "It's like trying to float a boat in the desert. They've taken away the ability to warehouse risk."
With trading on OpenDoor set to commence in April, participants with more than $3 trillion in combined assets under management are on board. Estes, who grew up in Las Vegas and received a bachelor's in economics and business administration from the University of Redlands in California in 1981, leads a team of 17 in Jersey City, New Jersey. They expect to have clients with more than $14.8 trillion in total AUM within four months of the launch. In September, Michael Paulus, a Treasury Department official during the Clinton administration who was most recently public sector group head for JPMorgan Chase & Co. in Hong Kong, joined OpenDoor as senior managing director with a focus on attracting foreign central banks; one signed on to be trading on day one. "At launch it's all about having critical mass among both end users and sponsors," says Estes, 57. "I have complete confidence in the technical build and the platform itself" as an answer to what she calls "the structural liquidity problems facing 98 percent of the U.S. Treasury market."
A key systems supplier is Broadway Technology, a company that Estes has known since 2003, when as a managing director of Countrywide Securities Corp. she became Broadway's first sell-side customer for the primary dealership that she was building there. "It is not enough to have a good idea and excellent technology," she says. "Many platforms have come to market with both and still failed. OpenDoor is addressing a debilitating and structural market problem."
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