One and a half years after being spun off from Goldman Sachs, REDI is forging ahead as a stand-alone provider of trading technology.
In an era on Wall Street where opaqueness and ‘black boxes’ are decidedly passé, REDI is pushing transparency in its processes and products.
“Openness is a core tenet of our business, and as such we are actively working to collaborate with the industry,” REDI Chief Executive Officer Nangalia told Markets Media in December 2014. “We are in the process of finalizing several interesting partnership agreements with other vendors, which will allow us to provide clients with a more effective solution than any one vendor can.”
In 2014, REDI integrated InstaQuote, an EMS it acquired from Bank of America Merrill Lynch as part of BaML’s equity investment in REDI. Clients of InstaQuote have been migrated to REDIPlus, increasing the firm’s client base and growing the platform’s capabilities. REDIPlus now offers a full suite of middle- office services, including deeper integration with a number of clearing and prime brokers and expanded risk management capabilities.
“In many ways 2014 was about continuing our evolution as an organization to become the open, transparent and industry-backed fintech company we want to be,” Nangalia said. “And we’ve accomplished this without impacting our core client franchise. REDI’s a totally different than what it was even two years ago.”
Rishi Nangalia, REDI
The company now includes an amalgam of people with technology and finance backgrounds, from both the buy side and sell side. “Not just from inside the industry, but also people from outside the industry, places like Amazon, Google, Red Hat and other high-tech shops,” Josh Schubkegel, REDI’s chief technology officer, said in December. “That’s a key part of our strategy — bringing in folks from outside of the industry who have ideas on development and testing processes that differ from what you’d historically find in the financial services space.”
Thematically, the industry is in “a finding-its-footing but stable mode,” said Nangalia. “It’s not growing explosively like it did in the early 2000s, but it’s also not going through extreme volatility that it went through in 2008-2010. We seem to be adjusting to a new normal where firms adopt a laser-like focus on their core competencies”
New York-based REDI, known for the REDIPlus EMS, was owned and operated by Goldman Sachs from 2000 until 2013, when the Wall Street giant sold a majority stake to a consortium of financial firms. “In 2013 the biggest business highlight was the fact that REDI transformed itself from being a broker-owned EMS and became an independent company,” Nangalia told Markets Media in Jan. 2014.
The rationale for the REDI spin-off was to make the trading platform broker-neutral and attract more order flow, including some from market participants who compete with Goldman and would not want to support a Goldman system. While REDI was new as a standalone company, Nangalia emphasized that it was not a startup — rather, it was a mature company with an established customer base from day one.
Nangalia previously co-managed Goldman’s electronic trading business-development group.