Portware Buys Aritas Assets For Trade Execution Analysis
Portware, a New York based execution management service provider, has bought some of the assets of the former Pipeline Trading to help fund managers improve their trading decisions.
The deal with Pipeline Trading, now called Aritas, includes AlphaPro and the Alpha Switching Engine but not Pipeline's broker-dealer unit or dark pool, which was part of an investigation by the Securities and Exchange Commission last year. Pipeline agreed to pay a $1 million fine without admitting or denying the U.S. regulator's allegations.
Founded in 2000, Portware helps institutional investors manage their orders and analyze trade execution costs. AlphaPro relies on a form of artificial intelligence for predictive analytics or analyzing trading decisions in microsecond increments to find the optimal strategy for different types of trades. AlphaPro works in conjunction with the Alpha Switching Engine so fund managers can choose and change appropriate algorithms during the course of the trade.
In a statement, Portware says that the new tools when incorporated into clients' automated workflows will reduce information leakage and enhance execution quality. Pipeline's technology was put on the block following the firm's restructuring late last year after it was fined by the SEC in October for not disclosing order routing practices to its clients; an affiliated high frequency trading group was interacting with orders in Pipeline's dark pool. The former Pipeline entity called Milstream, which provided most of the liquidity for Pipeline's dark pool by taking the other side of Pipeline customer trades, was disbanded in December. In January, Pipeline changed its name to Aritas.
Henri Waelbrock, director of research at Pipeline who developed its predictive analytics technology will join Portware as will Jay Biancamano who had been running Aritas since November 2011. Biancamano was formerly head of marketplace and global strategy for Liquidnet, which operates a dark pool for block trades. Alfred Eskandar, who resigned as former head of US equities for Liquidnet in December 2011 was tapped to become Portware's chief executive in February 2012 and in the statement issued by Portware says the firm was to help broker-dealers address the needs of institutional investors to better control their trading strategies and commissions. He reports to Portware founders Eric Goldberg and Ary Khatchikian now chairing a new board of directors. Scott De Petris, Portware's former chief operating officer is now president reporting to Eskandar, who has also run Liquidnet's global corporate strategy.
Written by Chris Kentouris, Editor-in-chief (Chris can be contacted through Chris.Kentouris@hotmail.com)