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Billionaire Ken Griffin’s Citadel Securities has hired former Goldman Sachs executive Jim Esposito as president of the high-frequency market-making firm, underscoring the ambitions of upstart trading businesses to rival traditional Wall Street banks.
Esposito, known to colleagues as “Espo”, was one of Goldman’s most senior bankers until his surprising departure in January. The role of president is a new one at Citadel Securities, and a person familiar with the hire said Esposito’s primary role would be helping to grow the firm’s ranks of clients and partnerships.
“I am excited to join Citadel Securities, a next-generation capital markets firm with world-class talent and cutting-edge analytics and technology,” Esposito said.
Esposito will start at Miami-based Citadel Securities in September, reporting to chief executive Peng Zhao.
“We are thrilled to welcome Jim to Citadel Securities during a period of significant expansion and opportunity for our firm,” Zhao said.
Citadel Securities was founded in 2002 as a separate entity to Griffin’s $63bn hedge fund Citadel, and has emerged as a player in global markets in its own right. It has capitalised on new regulations that have constrained investment banks that traditionally acted as the principle middle men in financial markets.
One of the largest beneficiaries from the move to high-speed trading, Citadel Securities acts as an intermediary between sellers and buyers in stocks, bonds and derivatives. It has grown into the biggest market maker for US stocks and is responsible for about a third of all US retail stock trades. Citadel Securities is also expanding into new asset classes and geographies, including Eurozone sovereign bonds.
Net trading revenue at the privately held Citadel Securities jumped about two-thirds to $2.3bn in the first quarter, according to a person familiar with its performance. This puts it on track to beat the $6.3bn in net trading revenue it recorded last year and about $7.5bn a year earlier.
Rival Jane Street had expected first-quarter net trading revenue to be roughly $4.4bn, more than double the level it achieved a year prior and up 35 per cent from the end of 2023, the Financial Times reported last month.
Two years ago Griffin sold a $1.2bn stake in Citadel Securities to venture capitalists Sequoia and Paradigm, valuing the trading firm at about $22bn and paving the way for an initial public offering of one of the world’s biggest market makers.
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