Chairman and Chief Executive Officer
MarketAxess Holdings
[PNR]
Emerging from J.P. Morgan & Co.’s e-finance incubator, LabMorgan, in 2000 and hitching its early fortunes to corporate bonds, the MarketAxess institutional trading platform raised $55 million in a November 2004 IPO. Four years later the stock was at less than half its $11 offering price, but this year it has been consistently above $20, and founder and CEO Richard McVey is proclaiming “a watershed moment.” Credit market conditions have been favorable, to be sure, but the 51-year-old McVey has deftly diversified the product portfolio and put the New York–based company in a position to profit from the accelerating automation of over-the-counter transactions. Record first-quarter results — revenues rose 25 percent from a year earlier, to $43.6 million, and pretax income jumped 59 percent, to $17.7 million — may be an indication of things to come. While industrywide volumes were flat, MarketAxess’ global total grew 36 percent in the first quarter, and its other asset classes — emerging markets, high-yield U.S. and European corporates, credit default swaps — soared 78 percent. Added to the menu in May were preferred stocks and consumer-based asset-backed securities. McVey points to “a virtuous circle” of operating leverage: “More institutional order flow attracts more liquidity, which in turn leads to expansion of the system.”
