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XTX founder winds up partnership tied to UK tax dispute
The UK Supreme Court ruling two months earlier left Gerko and other traders facing a tax liability of about £22.5 million.
Hedgeweek reports that Alex Gerko, the billionaire founder of quantitative trading firm XTX Markets, is taking steps to wind up the investment partnership at the center of a long-running UK tax dispute. The reported move comes two months after the UK Supreme Court ruled against Gerko and the relevant investment vehicle in a case involving the taxation of deferred compensation arrangements. Hedgeweek says the decision resulted in a tax liability of about £22.5 million, or $30.6 million, for Gerko and other traders involved. Hedgeweek also notes that HFFX stopped investing in 2015, when Gerko left GSA and later established XTX. Gerko had argued that the tax treatment amounted to significant double taxation, because of how the income was treated when he was still relatively junior in the financial industry. The Supreme Court ruling was one of two major City tax disputes decided by the UK’s highest court this summer, Hedgeweek says, with hedge fund manager Michael Platt’s BlueCrest Capital Management separately losing a roughly £200 million case over the treatment of trader compensation paid through a limited liability partnership. Hedgeweek adds that a representative for Gerko reportedly declined to comment on the closure of HFFX.