Former AQR trading head's BestEx Research builds futures algorithm for buy side

BestEx Research Group LLC is wading into the futures market, adding to its suite of algorithmic trading offerings for hedge funds and money managers.

Led by Hitesh Mittal, the former global head of trading at AQR Capital Management LLC, the trading technology and execution provider has launched a new set of algorithms explicitly built for the futures market in another push to cut transaction costs for the buy side. BestEx's futures algorithm suite has been built with live simulation and back-testing capabilities, the company said in a Feb. 3 announcement.

"They're in the business of calling the shots like which way the market's going to go, not on how to execute orders," Mittal said of the buy side in an interview. "So we are filling that void."

Mittal launched BestEx about two years before he ended up victorious in a dispute involving his former employer, ITG. Mittal claimed that ITG defamed him during a regulatory probe that took place after he had left ITG while he was at AQR. Mittal won the FINRA arbitration case and in 2019, ITG was ordered to pay him $6 million as a result of the claims, according to Bloomberg News.

At BestEx, which was recently valued at $50 million following a series A investment of $5 million from Quadrature Capital Ltd.-affiliated QC Ventures ltd., Mittal has worked to build out a set of broker-neutral algorithms that hedge funds, institutional investors and others could use for equities, futures and foreign exchange trading. The company launched its equities algorithms almost two years ago and plans to enter the foreign exchange market once the futures products are up and running.

Its futures products are designed to address what Mittal said was a lack of innovation in the market caused by banks simply repurposing equity algorithms for futures trading. At AQR, Mittal was tasked with building out the hedge fund's execution algorithms. Now, he wants to effectively bring broker-neutral algorithms to others on Wall Street without them needing to build out the products themselves.

"We had to start in equities first," Mittal said. "But our goal was always to be multi-asset and provide the same level of focus on performance across asset classes."