London emerges as global powerhouse in quantitative trading: FT

[Aerial view of finance district in London]
CHUNYIP WONG

London is fast becoming one of the world’s leading hubs for quantitative finance, as a wave of data-driven trading firms post record revenues and attract top talent from U.K. universities, the Financial Times reported Sunday.

Algorithmic trading group XTX Markets and quant hedge funds Qube Research & Technologies and Quadrature Capital each generated more than £1 billion ($1.31 billion) in annual revenue, according to recent filings cited by the newspaper. Their results cement their status among the most profitable firms in the capital’s financial sector.

Quant firms, which rely on mathematical models and high-performance computing rather than traditional human traders, have gained prominence thanks to lighter regulation and advances in machine learning.

XTX, led by founder Alexander Gerko, reported £2.7 billion in revenue and £1.3 billion in post-tax profit last year, a 54 percent increase. The firm is also investing more than €1 billion ($1.15 billion) in a new data center in Finland. Qube, focused on market-making and statistical arbitrage, earned roughly £2 billion, while Quadrature’s revenues rose nearly fivefold to £1.2 billion since 2020.

Other players, such as G-Research, also continue to expand, supplying research and technology to affiliated investment funds that generate sizable trading profits.

London’s talent pipeline has been key to this growth. Graduates in mathematics, physics and computer science increasingly opt for quant firms over traditional banking or big-tech careers, lured by starting salaries of £250,000 to £800,000 and a more flexible work culture, the FT reported.

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