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February 3, 2014

Liquid Goes Prime

By Peter Chapman

Order management system vendor Liquid Holdings is getting ready to offer clients prime brokerage services.

During a recent earnings call, Liquid Holdings chief executive officer Brian Storms said the firm has been building out its Liquid Prime infrastructure over the last few quarters.

"The company's plan is to offer the service to emerging and small- to medium-sized hedge funds in early calendar 2014," he added.

Liquid Prime Services is one of the firm's broker-dealer subsidiaries that, until June, housed an over-the-counter trading operation. Liquid Holdings, a firm formed last year by former executives from proprietary trading firm ECHOtrade, exited its sales and trading businesses earlier this year, preferring to focus on its order management system business.

Last April, Liquid Holdings hired former Goldman Sachs executive Julia Bronson as an executive vice president of Liquid Prime Services. According to regulatory filings, Bronson was made president of the prime brokerage unit in October. Liquid Prime clears through Goldman Sachs Execution & Clearing.

It is not unusual for suppliers of order management systems to also offer prime brokerage services. ConvergEx offered both until it sold off its Eze Castle unit this year. Also, a few of the larger brokers provide their customers with execution management systems as well as prime brokerage services.

Liquid Holdings was formed last year as a holding company with numerous businesses by Brian Ferdinand, an ECHOtrade partner and its New York branch manager; Robert Keller, former chief operating officer at ECHOtrade; and former NYMEX chairman Richard Schaeffer.

In the first nine months of 2013, half of its revenues came from its brokerage operation.


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