Wiet Pot, co-head of the Dutch high-speed trading firm that’s said to be bidding for Goldman Sachs Group Inc.’s floor-trading business, is a former partner of the investment bank who once helped run its equities division.
Pot’s IMC Financial Markets has expanded from Amsterdam to Chicago and Sydney, where it uses algorithms to make markets in stocks, commodities and currencies. Pot serves with Rob Defares, one of IMC’s founders, as co-chief executive officer at IMC, which he joined in 2008.
The right to make markets on the New York Stock Exchange floor was once a license to mint money by collecting the customary 12.5-cent spread between purchases and sales. The huddles of traders at the Big Board have been shrinking since regulators allowed brokers to quote prices in pennies. Computerized traders like IMC are still able to eke out profits on the smaller spreads.
Two of the biggest high-frequency firms, Virtu Financial Inc. and KCG Holdings Inc., have already taken over much of what used to be called the specialist business, the niche that Goldman Sachs is now exiting. Goldman Sachs, which valued its market-making rights at $502 million in 2007, is seeking just $30 million for the operation, a person familiar with the matter has said.
Before joining IMC, Pot was chairman of Kempen & Co., the Amsterdam-based merchant bank. He stepped down in 2006 after internal securities compliance violations prompted the Dutch Central Bank and the securities regulator to ask for his resignation.
Pot had a 0.6 percent stake in Goldman Sachs when it went public in 1999, the New York Times reported in 2011. The stake was valued at about $150 million at the offering. He’s now worth about 300 million euros, or $413 million, according to Quote, a Dutch trade magazine.
Remco Lenterman, an IMC managing director, and Tiffany Galvin of New York-based Goldman Sachs said their companies don’t comment on speculation.
IMC BV, founded in 1989 by two traders working on an options exchange, says on its website it was among the first to use handheld computers on the floor. Profit fell 52 percent in 2012 to 78 million euros, according to the Dutch Chamber of Commerce.
IMC is a founding member of the FIA European Principal Traders Association, a high-frequency trading lobbying group. Fast computers allow firms to cut the risk of being caught off guard quoting outdated prices, a savings that gets passed on to buyers and sellers, Lenterman and two other IMC executives told the Financial Times in 2010.
“Where exchange speeds are high, it enables market makers to manage their risk better and therefore they are willing to quote narrower spreads and for bigger size,” the IMC executives said.