Citigroup Inc. has tapped a quantitative trading veteran to help the bank vault into that hot category, as part of a broader build-up of its equities unit.
Thomas Chippas will join as global head of quantitative execution, the bank said Friday.
Mr. Chippas previously led quant-trading units at Barclays PLC and Deutsche Bank AG, before leaving for jobs beyond Wall Street, most recently as chief operating officer of blockchain-technology startup Axoni Inc.
The return to Wall Street for someone who left to work at a tech startup is an indication of the growing importance of the highly complex and tech-heavy "quant" style of trading. Banks are trying to keep up with clients who are increasingly shifting away from fundamental trading strategies to ones dictated by data and patterns. The shift comes as banks' equity trading desks have struggled with low volatility and a growing emphasis on low-cost forms of passive trading.
"I would categorize the environment as being okay, but low volatility," Citigroup CEO Michael Corbat said an at industry conference Thursday, echoing other bank chief executives who were expecting a dip in trading revenue in the second quarter.
The pressure led banks across Wall Street to invest in quant trading and prime brokerage, which provides technology and financing for clients.
Citigroup in particular has said that despite the tough environment for stock trading, it believes it can sharply grow its market share -- which has lagged behind peers in recent years -- in large part by investing in prime brokerage, which also provides clearing services for complex quant trading.
"We called ourselves out a few years ago" for being too small in equities, Mr. Corbat said Thursday. "I think you've seen us continually taking revenue share."
Citigroup's first quarter equity revenue rose 10% from a year ago, versus smaller gains or dips among its larger rivals.
Mr. Chippas will oversee the global expansion of systems that allow hedge funds and asset managers to rapidly put on or take off trades based on quantitative signals, known as "low-latency execution," the bank said. He will report both to the head of cash trading and the head of prime finance.
Such quant trading is "critical in continuing the momentum of our prime and equities businesses," said Adam Herrmann, Citigroup's global head of prime finance.
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(END) Dow Jones Newswires
June 05, 2017 02:48 ET (06:48 GMT)