FX Trader Bucks Lean Times to Lock in $100 Million Investment

(Bloomberg) -- Aston Capital Management LLC is bucking the trend in the foreign-exchange market, growing as other parts of the industry struggle.

The currency-trading firm got an infusion of $100 million from private investors this year to fuel an expansion of its market-making business. The investment comes amid lean times elsewhere in the industry: Revenue sank 21 percent for Group-of-10 foreign-exchange desks at the world's largest banks in 2017, according to Coalition Development Ltd.

Aston uses private funds to make markets in the style of a bank's fixed-income, currencies and commodities desk. Instead of providing liquidity with a bank's capital, the firm uses investor money to take orders and assume the risk of buying, holding and selling currencies in the open market. It seeks to profit on the price difference, or spread, of those transactions.  

“This is one of the heaviest lifts I've ever done in my life,” Isaac Lieberman, Aston's founder and chief executive officer, said in an interview from the company's new office in Manhattan. “We're not too big to fail and we're making great strides.”

Lieberman started Aston in 2013 with his own money after working as a trader at JPMorgan Chase & Co. and Bear Stearns Cos. for 18 years.

For Lieberman, that lift has involved registering with regulators, setting up custodial accounts and spending three months in Tel Aviv to add staff and move them to a bigger office. The firm, which includes nine quants in Israel, is also looking to hire four more people after adding compliance, legal and risk management staff in recent months. That contrasts with job cuts of 30 percent on G-10 currency desks since 2010, Coalition data show.

Read more: Flash-Crash Trader Jumps Into FX Market When Others Flee

Lieberman and the firm's chief operating officer, Kamyar Khaledi, are focused on growing the business, after the fund rose 5.2 percent last year during a period of low volatility. That followed a 24 percent jump in 2016 as turbulent markets in the first quarter coincided with an expanding customer base. Aston is betting that this year's tumultuous start in financial markets will provide more trading opportunities.

“Volatility's going to come back and it's a healthy thing for everyone,” Lieberman said. “It always comes back, and I always thought it was a great time to build in a low-vol market.”

To contact the reporter on this story: Lananh Nguyen in New York at lnguyen35@bloomberg.net.

To contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net, Mark Tannenbaum, Boris Korby

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