ITG's Smart Hire: Raymond Killian Picks Bob Gasser

By Ivy Schmerken, Wall Street & Technology

Finally finding a successor to its visionary founder and tireless leader Raymond Killian, Investment Technology Group named Robert (Bob) Gasser, former CEO of NYFIX Inc., as its new president and CEO, starting Oct. 4.

In a conference call with analysts and media on Monday, Killian, 69, said he would remain in his role as chairman of the board and devote his full efforts to a six-month transition.Gasser stepped down as CEO of NYFIX Inc. two weeks ago after the financial technology company sold an equity stake to Warburg Pincus and named veteran financial services executive P. Howard Edelstein as its new CEO.

Gasser, 41, joined NYFIX in 2001 as CEO of NYFIX Millennium, the dark liquidity pool, and prior to that he was head of U.S. equities trading at JPMorgan.

Killian has tried to retire at least two or three times but he had difficulty finding the right successor. A pioneer in electronic trading, Killian has held the CEO title since March of 1994. During his tenure, he established the first crossing network, POSIT, as a joint venture between BARRA and Jefferies.

He stepped down as CEO in January 1997 but later returned in September of 1998 after a successor became ill and passed away. Killian named another successor a few years later, but the product line fell behind and allowed other competitors to catch up, noted an analyst during the conference call.

Since Killian's most recent return, ITG has bounced back by evolving the POSIT product into a more continuous matching system, known as Posit NOW, and taken the bold step of acquiring Macgregor, a leading buy-side order management system, for $230 million last July. The system has been integrated into ITG's suite of execution products.

One analyst asked Killian what lessons he learned from those earlier hiring experiences that didn't turn out so well.

This time Killian said during the six=month search, he and the board emphasized characteristics such as cultural fit, industry knowledge and technology background. "The added advantage that Bob brings to the table is I've know him as a competitor, vendor and a customer," said Killian.

In explaining what attracted him to ITG, Gasser praised the intellectual capital of its employees "as par none," and noted that sitting from his side of the fence, ITG had developed a truly comprehensive suite of trading products.

As someone who competed against the POSIT crossing network with the NYFIX Millennium, Gasser praised ITG for "continuing to enhance the POSIT suite of products, and for enhancing its products including the most-sophisticated direct market access products, transaction cost analysis systems and algorithms in the industry."

He called ITG's real-time transaction cost analysis products a competitive weapon and a huge asset. In addition, he cited the acquisition of the Macgregor OMS by ITG as opening the door to the future of trading since the company will integrate the OMS with execution management systems in a broker-neutral model.

Gasser became CEO of NYFIX in November of 2005 when the provider of FIX order routing networks, sell-side side order management systems and the Millennium dark liquidity pool was embroiled in an accounting dispute with its auditor and ended up being de-listed from the Nasdaq National Market System and forced to trade its stock in the Nasdaq Pink Sheets.

During the call, Gasser said he accomplished three things: He stabilized the company; brought in strong management - primarily a new CFO - and created a transformational event in the sale of equity to Warburg Pincus.

In addition, Gasser focused heavily on building NYFIX Millennium into a legitimate dark liquidity pool in the listed trading space, he noted.

Hinting at what he'd focus on at ITG amidst the market structure and regulatory changes unfolding, Gasser said there was room for penetrating more clients in the U.S. and new asset classes, but he said it was too early to provide more details. He also emphasized the potential for ITG to expand overseas where trading trends were following a pattern similar to the U.S.

Clearly, ITG will continue to face new crossing networks from broker dealers and exchanges entering the space. Gasser said, the barriers to entry in the crossing space are getting higher and higher every day. "I think separating exchanges from the broker dealer model is very important. We believe POSIT is well positioned in that space," he added, noting that he doesn't see "any abatement in new ATSs (alternative trading systems)."

As someone who focused his career on the U.S. equity trading markets, Gasser said he would focus on flattening his global learning curve in the electronic trading space.

"I feel very comfortable in the algorithmic trading space, the technology space, the (FIX) network space and the order management system. The global facets of our business are going to be a priority," he said on the call. Gasser also said he would be "very engaged" in ITG's partnership with Merrill Lynch to create Block Alert for institutional trading.

Meanwhile, Killian let it be known that he intends to hang around before handing over the crown jewels. When asked what he will focus on for the next six months, Killian said he would focus on "Bob." After six months passes, he mentioned playing golf. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio