Exegy, a provider of market data and trading technology for capital markets, is accelerating its plans to improve every part of the front-office trading experience after an active 18 months which involved making two acquisitions and receiving investment from a private equity firm.
The acquisitions allowed Exegy to expand the portfolio of products and services available to clients and to be more flexible in engaging with firms that want to build part of the solution. In addition, they accelerated Exegy’s strategic plan to integrate FPGA and AI technology across its front-office technology stack. Exegy said it is the only global firm offering a product suite that uses FPGA technology at all stages of the trading lifecycle to minimize latency and to maximize capacity and stability.
David Taylor, co-president and chief technology officer of Exegy, told Markets Media: “We are the only place to go for the tip-of-the-spear solutions: hardware-accelerated, intelligence-ready, full-featured, and backed up by a global services team.”
An inflection point arrived in May 2021 when Exegy acquired Vela Trading Systems, a provider of data and execution technology for global multi-asset electronic trading, a move that was backed by private equity firm Marlin Equity Partners.
James O’Donnell, chief executive of Exegy, said at the time that the two companies’ portfolios and their underlying technologies complemented each other extremely well. Vela’s automated trading and direct market access platforms are being integrated with Exegy’s strategic investments in predictive trading signals and hardware trading platforms.
To accelerate its growth strategy Exegy made another acquisition in May 2022 with the purchase of Enyx, a developer of field-programmable gate array (FPGA)-based, high-performance trading solutions.
FPGA semiconductors have logic blocks that can be programmed to meet a specific functionality and this flexibility continues even when they have been installed, as the programming can be changed after being used by customers.
Arnaud Derasse, founder and chief executive of Enyx, said that FPGA-based technologies remain out of reach for most trading firms and reserved only for those with deep expertise. Therefore, the combination of Exegy and Enyx, enables trading firms to leverage FPGA technology, which has become table stakes in many markets, and to reduce time-to-market.
Taylor gave Axiom, Exegy’s new consolidated feed, as an example of a product powered by hardware acceleration technology which provides higher capacity and delivers stability and content advantages.
“Axiom also includes our predictive signals and market analytics,” Taylor added. “We have a set of predictive content that is not available from traditional consolidated feed players and provides efficient access to novel data for new trading strategies and quant models.”
Clients are demanding not just market data, but intelligent data, such as predictive signals.
“Hardware-acceleration and AI expertise, that’s part of our DNA that is going to make us the leaders in the market across the areas where we’ve delivered solutions,” said Taylor.
Acquisitions accelerate growth
The firm has come a long way from its initial development at Washington University in St. Louis and incorporation in 2003 to commercialize hardware acceleration technology.
Taylor said: “We remain committed to the origins of the company, which is to fuel innovation and prosperity by powering competitive and resilient capital markets. That’s why we get out of bed in the morning.”
Exegy now has more than 250 clients, including the top 10 banks, leading hedge funds and asset managers and several exchanges. The company employs 330 staff around the globe.
In 2006, the company released its first capital markets product — the Exegy Ticker Plant, which Taylor said was 10 times faster and had 10 times greater capacity than was previously available. That combination proved particularly attractive to high-frequency trading firms, igniting Exegy’s growth.
The original vision was to build a company that was dominant in direct feed market data but, over time, could also encompass a wider range of market data use cases, including cloud-native services. Exegy also seeks to deepen its partnership with its clients across the front office trading cycle by also providing predictive signals, trading platforms, and execution platforms. The two acquisitions and the investment from Marlin Equity Partners has allowed Exegy to accelerate its plans to fulfill this vision.
In 2021 Exegy announced record-breaking sales growth and post-pandemic volatility has boosted demand for low-latency, stable market data. As a result, firms who have under-invested in their trading infrastructure are finding that it is breaking, according to Taylor.
Therefore in 2023 he expects Exegy to continue to execute on delivering intelligent data, predictive signals and hardware-accelerated technology throughout the trading stack.
Taylor said: “You may see us do more M&A activity to support that story. We have a very disciplined approach to M&A with our partners, Marlin Equity Partners.”
