Welcome to the latest episode of At the Forefront: Fintech Conversations!
To learn more and listen to our previous episodes, click here.
In this episode, Forefront Senior Vice President CJ Lengua sits down with Michael Higgins, International CEO and Global Head of Business Development at Hidden Road Partners, the global credit network for institutions. They discuss Hidden Road’s origins, offerings and recent news, including its new Synthetic Prime Brokerage offering.
To begin, Michael recounts how Hidden Road first came to market. A multi-asset prime broker and clearing firm, Hidden Road is “a sell-side business funded with buy-side capital” offering cross-asset and cross-product services. Prime brokerage and margin financing are critical parts of the infrastructure of any trading firm – credit is effectively the lifeline of their businesses. At the time Hidden Road was established, the space was dominated by incumbents who had built their prime brokerages and clearing firms decades earlier as facilitation businesses for large franchise clients. Over the past decade, many of these firms have exited the space, creating a critical gap in the marketplace – and an opportunity for a modern prime broker to step up and replace them.
Next, Michael discusses Hidden Road’s current service offerings. While establishing the firm, Hidden Road worked with local regulators across jurisdictions to set up a series of global entities. In parallel, the firm built a horizontal clearing infrastructure using modern technologies and techniques from high-frequency trading, enabling a real-time, holistic view of counterparty risk across assets. Hidden Road started out in the foreign exchange markets, an asset class where the founding team members had particularly deep experience. After some initial success, Michael explains, institutional demand grew for Hidden Road to enter the digital asset space. He emphasizes that Hidden Road’s singular focus on prime brokerage, clearing and margin financing ensures there are no conflicts of interest with clients, even as the business grows to cover more asset classes.
CJ and Michael also recap Hidden Road’s recent company milestones. Just last month, the firm announced its expansion into listed derivatives clearing as an FCM clearing member on CME Clearing. It also announced the launch of a multi-asset swap platform, known as Route28, run out of its FCA-regulated UK entity. A Synthetic Prime Brokerage offering with a front-end and matching technology powered by partner Crossover Markets, Route28 covers OTC swaps across all major asset classes, including equities, commodities, foreign exchange rates and digital assets.
Lastly, when asked what’s next for Hidden Road, Michael shares that there has been demand to build bespoke swaps for products like the recently approved Bitcoin ETF. He states that Hidden Road remains focused on building a prime clearing business while staying curious about how to solve problems in and around this space for its clients. By continuing to provide access to deep pools of financing and various liquidity destinations across asset classes, Hidden Road’s ultimate goal is to power trading strategies across the ecosystem in a scalable way.
See below for a breakdown of what was discussed. Happy listening!
Timestamps:
0:55 – Introduction to Hidden Road and Michael’s role as Global Head of Business Development
2:25 – The origins of Hidden Road
4:45 – Hidden Road’s current services and offerings
7:30 – The recent launch of the Route28 platform
10:40 – What sets Hidden Road apart and what’s next
