If you read J.P. Morgan’s latest shareholder letter, you knew additions to the bank’s electronic trading team were likely coming. Daniel Pinto, head of J.P. Morgan’s corporate and investment bank, noted earlier in the month that when the firm didn't spend on electronic trading, the effect on the business was "crippling." The bank’s latest investment comes in the form of new hire Philip Pearson, the former head of algorithmic trading for the U.S. and Latin America at ITG, which was acquired by Virtu Financial late last year. He started with J.P. Morgan earlier this month as an executive director in New York.
At ITG, Pearson was a product manager in the algorithmic trading group responsible for dark pool aggregation products before being promoted to the head of algorithmic consulting. Pearson cut his teeth working on the institutional trading desk at E*Trade Capital Markets. While his specific role with JPM remains unclear, Pearson will be working within its electronic trading group. Based on his background, he could conceivably be a fit for the bank’s new "sophisticated trading platform" called "Algo Central,” which uses predictive analytics to tailor client orders.
After seeing the benefits of electronic trading in equities over the past several years, J.P. Morgan has joined Goldman Sachs in prioritizing algo trading for fixed income products. In the past year alone, JPM says its volume of algorithmic-driven FX trades has risen 44%, according to Pinto. Requests for quotes (RFQs) for 1 euro swaps are up 205%.
ITG and J.P. Morgan have a bit of a history. The fintech firm poached at least three high-level J.P. Morgan executives last year before agreeing to terms with Virtu, including managing director Vinayak Patade. This was all done while ITG was actually cutting headcount ahead of its restructuring. And in a random twist of fate, J.P. Morgan acted as ITG’s advisor in its acquisition talks with Virtu. Needless to say, the two firms know each other quite well.
Finra records confirm Pearson has joined JPM.
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