Alex Gerko, the billionaire founder of quantitative trading firm XTX Markets, is taking steps to wind up the investment partnership at the centre of a long-running UK tax dispute, according to a report by Bloomberg.
The report cites company registry filings as revealing that HFFX, the fund Gerko operated while working at London-based hedge fund GSA Capital Partners between 2010 and 2015, is being voluntarily closed, according to c
The move comes two months after the UK Supreme Court ruled against Gerko and the investment vehicle in a case concerning the taxation of deferred compensation arrangements. HFFX stopped investing in 2015, when Gerko left GSA and established XTX.
The Supreme Court ruling resulted in a tax liability of about £22.5m ($30.6m) for Gerko and other traders involved in the case.
Gerko had argued that the tax treatment amounted to significant double taxation on income earned when he was still a relatively junior figure in the financial industry.
The case was one of two major City tax disputes decided by the UK’s highest court this summer. Hedge fund manager Michael Platt’s BlueCrest Capital Management separately lost a roughly £200m case concerning the treatment of trader compensation paid through a limited liability partnership.
Gerko previously said the sums involved were modest relative to the billions of pounds in tax he has paid during his career.
A representative for Gerko at XTX reportedly declined to comment on the closure of HFFX.
Gerko, who is 46, founded XTX after leaving GSA and has since transformed the firm into one of the world’s largest electronic market-makers. XTX now handles more than $250bn in trading volume each day across global financial markets.
The firm’s profitability has benefited from periods of heightened market volatility. Since the beginning of 2020, XTX has paid more than $6bn in dividends to a holding company controlled by Gerko, according to Bloomberg.
Gerko began his career trading equities at Deutsche Bank before moving into foreign exchange. He joined GSA in 2009, where he headed its currency-trading operations before departing to establish XTX six years later.
The entrepreneur has also become a prominent UK philanthropist, supporting education projects, the London Symphony Orchestra and a US telescope initiative. Together with his wife Elena, he is funding a new mathematics school in London scheduled to open this year.
