Nomura eyes crypto trading as part of 50-strong digital assets spin-off
Nomura is building a 50-strong team for its crypto spin-out, and is aiming to start trading digital assets early next year as it makes a major push into the sector.
The Japanese bank is building headcount for its digital assets firm, Laser Digital, in the midst of the so-called crypto winter, making a long-term bet on the sector as rivals take a more cautious approach.
Laser Digital’s first venture is a venture capital investment division, which will target the crypto sector. Nomura is now hiring expertise and building an electronic trading platform to launch by April next year, executives told Financial News. The new firm aims to have around 50 employees by March 2023.
“We’ve been slightly fortunate to be building this in a crypto winter. It gives us the opportunity to find talent that is more available and at a more sensible price,” said Steven Ashley, Nomura’s former head of wholesale banking, now chair of Laser Digital. “There was some craziness happening in the first few months of 2022, but we’re taking a longer view and it’s better to build out the business in the current climate.”
Ashley joined Nomura in 2010 as part of its plans to expand its international investment bank after it bought Lehman Brothers’ European operations in 2008. A trading veteran, he later oversaw Nomura’s entire wholesale banking unit, presiding over numerous strategic shifts including shutting its European equities business in 2016 and pulling back from a number of trading functions in 2019 at the cost of 100 jobs.
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London-based Ashley stepped down to become chair of Laser Digital in September, with Christopher Willcox, a former JPMorgan banker who joined in 2019 based in New York, taking over as head of wholesale banking. Jez Mohideen was named chief executive of the new digital venture.
“As you take more supervisory responsibility, your role becomes less hands-on, compared to being involved with the team and the markets on a minute by minute basis,” Ashley said of his switch. “I think a lot of people who have taken those roles will agree that they prefer spending time at the coalface and I’m no different, so I’m going to be more heavily involved in the day-to-day running of the business now.”
Laser Digital has initially launched a crypto-focused VC investment firm, but plans to start secondary trading next year and eventually an asset management arm. It is domiciled in Switzerland, with offices in the UK and Dubai, and could open a venture in Tokyo in the future, Ashley said.
By spinning out the crypto venture from the rest of Nomura, Ashley said the aim is to move faster than other investment banks. The likes of Citigroup, JPMorgan and Goldman Sachs have all created dedicated digital assets teams in recent months.
“Crypto natives have a much more agile structure and are faster to market,” said Ashley. “We wanted to create a structure that has the flexibility of a crypto native, while still being able to call upon the solid risk management of a traditional financial institution.”
“We’re being a bit bolder than some of our competitors and making a concerted push into the sector,” he added. “We understand the opportunities, but also some of the challenges we will come across and we can attack those in a much more entrepreneurial fashion than traditional investment banks.”
Banks including Barclays and Goldman Sachs made initial forays into trading cryptocurrencies for clients in 2018 amid a surge in digital assets such as bitcoin, but shuttered nascent desks within months of starting them. Goldman launched a crypto derivatives trading desk last year as part of its digital assets team, but Nomura is one of the few large investment banks to make a concerted push into trading digital assets, Mohideen said.
READ Top Nomura banker Steven Ashley steps down to run digital assets unit
Mohideen said Nomura’s crypto trading function would focus on “systematic market-making” as well as “principal trading, which is where we can really add alpha”.
“We’re building the infrastructure and have been able to attract good talent because of where the crypto market is currently,” he said .”It will be a fit-for-purpose low-latency platform.”
While financial services professionals with traditional experience have jumped to crypto in recent months — largely ahead of the recent crash — Mohideen said there is growing demand to keep the expertise in-house as banks delve deeper into digital assets.
“For a lot of the mature crypto projects, there’s growing demand for people from traditional financial institutions,” he said. “Traders, options traders and structured products specialists are leaving larger entities, but that brings more credibility to the industry. For us, it’s also a chance to offer people these opportunities within a larger organisation.”
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