HFT Pays: CEO Of Firm That Accounts For 5% Of US Equity Volume Selling His NY Mansion For $114 Million

Tyler Durden's picture

Everyone knows that the most parasitic form of trading, that would be high frequency trading for those who may not have followed this website since 2009, is very profitable. Well, it is certainly profitable for those who operate the momentum-igniting, quote churning, queue jumping HFT firms in control of what's left of the "market", if not so much for anyone else. Just how profitable is it? Judging by the house that Vincent Viola, head of Virtu Financial, one of the largest high frequency electronic trading and market making firms, which according to Cifu accounts for more than 5% of US equities volume and over 10% of the of the average daily volume of MSFT, and which tried to expand even more aggressively with a failed bid for Knight Capital last year, has just put on the block.

According to the NY Daily News, the house that the HFT behemoth is trying to offload, is a "40-foot-wide mansion, one of the largest homes in the city, is on the market for a whopping $114 million — or half the price its owner, Wall Street investor Vincent Viola, spent to buy the Florida Panthers hockey team earlier this year."

The asking price for this seven-bedroom, nine-bath house would not only break the current record, but rip out its heart and step on it. The most expensive home in city history was The Harkness Mansion at 4 E. 75th St., a 36-footer that sold for $53 million in 2006.

And while it may not have been a high frequency flip, if purchased at the asking price, Viola is set to make nearly 5 times his money in just 8 years: Viola and his designer wife, Theresa, bought the house for $20 million in 2005. At the time the 16,000-foot spread was broken up into four large apartments and doctor’s offices, however it has since been redesigned into a mine-Versailles mansion with the help of Theresa Viola's firm Maida Vale Design.

If the offer is lifted, we will finally have validation that the housing bubble has taken out all previous highs. "Since the real estate bubble burst, no townhouse has broken the $50 million mark, though a few have tried, including the $90 million Woolworth mansion that most recently belonged to Lucille Roberts, the exercise queen. It has been taken off the market." It will also confirm that HFT does indeed pay well. Although, in all fairness to Viola, he did serve as former Chairman of the NY Merc.

That said, we expect Viola's next house to be even bigger: after all it is only a matter of time before the HFT powerhouse goes public as it has been trying since May. A quick reminder on just what Virtu does via Bloomberg:

Virtu, which provides bids and offers on 205 venues around the world in products from U.S. equities to silver and copper futures, says its fastest growth is currently in currency trading and providing liquidity to stocks in Asian markets including Japan and Australia. It expects rapid growth in new products that will become available when over-the-counter derivatives start trading electronically under rules mandated by the Dodd-Frank Act, Cifu and Concannon said.

 

Concannon and Cifu run the firm’s daily operations with Vincent Viola, Virtu’s controlling shareholder, chairman and chief executive officer. Viola, who was chairman of the New York Mercantile Exchange from 2001 to 2004, cofounded the company in 2008 with Cifu and Graham Free, its global head trader. Cifu, who is also chief operating officer, previously was a partner and co-head of the private-equity group at law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP.

 

Concannon, a former executive vice president at exchange operator Nasdaq OMX Group Inc., met with the SEC’s new chairman about running the agency’s division that regulates exchanges and sets policies for markets on April 10, White’s first day on the job, according to people briefed on the discussions who spoke on condition of anonymity because the meeting was private.

 

The lawyer and former exchange executive said he plans to stay at Virtu. He worked at the SEC in the mid-1990s and later held several positions at Island ECN and Instinet Group Inc. before joining Nasdaq Stock Market in 2003 when it bought a business owned by Instinet.

 

Private-equity firm Silver Lake Partners LLC invested in Virtu in 2011 in connection with the market maker’s acquisition of Madison Tyler Holdings LLC, which Viola and David Salomon, a former arbitrage trader at Goldman Sachs Group Inc., cofounded in 2002. Virtu is profitable every day, according to Cifu.

 

“As a market-making firm that does not take a directional view of the market, we historically have not had trading days where we lose money across the firm,” he said.

So for just under $120 million one can buy either Steve Cohen's Bloomberg building duplex, or the following:

The owners of 12 E. 69th St. have put a bow around their $114 million townhouse ... the perfect Christmas present?

The screening room was modeled on Theresa Viola's favorite movie palace in Queens, where she grew up.

The basement was expanded to accommodate a pool, sauna, game room, gym and a two-story screening room.

The master bathroom features a soaking tub made from a giant geode.

The coffered ceiling the grand living room features 14-karat gold leaf, and the floors are walnut and mahogany.

The massive kitchen features a pizza oven and huge TV among its features. The penguins are just for decoration.

An intricate grand staircase connects the first three floors of the home.