Axiom Capital Management, Inc., a small New York retail brokerage with a successful investment banking arm, is expanding its institutional trading operations, adding three veteran traders and planning several more hires, company executives said.
The firm hired a three-man institutional trading team, all formerly of Pulse Trading, in mid-September. The team is headed by Hal Smolanoff, who becomes an Axiom managing director. Joining Smolanoff is Ethan Vickery and Grant Rosenblum, who both become Axiom senior vice presidents. Pulse Trading was acquired by State Street Global Markets in 2011.
Axiom Capital, which has offices in New York, Texas and Florida, was launched in 1990 by Liam F. Dalton, a former managing director in Bear Stearns & Co.’s equities and fixed income area. The firm started as a retail brokerage catering to the high net worth crowd, and by the mid-1990s it launched an investment banking arm, located in Austin, Texas, that soon made a name for itself in the underwriting of private investment in public equity (PIPEs) deals and other private placements. Axiom also opened a research unit in 2010 which specializes in the alternative energy sector.
The firm’s expansion into institutional trading will build on its overall growth and leverage the opportunities the investment banking unit can provide, said Peter Jarck, a senior vp in the sales and trading division. “Axiom has doubled in size within the past several months,” said Jarck. “It’s a real growth spurt.” The firm is looking at about 10 new hires in total—mainly in sales and trading of equities, fixed income and derivatives—and is expected to make more announcements in the weeks ahead.
Jarck explained that Axiom Capital’s investment bank’s activity in several areas, such as PIPES, private placements, mezzanine and subordinated financing as well as bridge financing, has been gaining momentum, and the firm really wants to pitch these opportunities to a whole new cadre of institutional investors.
“These new institutional hires will bring more distribution points where we can tap into the banking relationships of the investment bank,” he said, adding the firm is pitching to long-only funds and hedge funds ranging in size from start-ups to some of the largest funds in the country.
Smolanoff explained that the trading model that his group brings to Axiom Capital “runs counter to what 99 percent of the Street is doing” by seeking fewer, not more, liquidity sources for their trades. His team will seek to improve pricing by “deconsolidating” the execution process and use more direct route executions in order to control information leakage. “Leakage happens when too many platforms are utilized and trade strategies are leaked into the information stream,” he said, noting that this model builds off the process the group used successfully at Pulse.
