Key Takeaways
- • Alex Gerko, founder of XTX Markets, is voluntarily winding up HFFX, the investment partnership at the centre of a UK Supreme Court tax dispute decided in June 2026, according to company registry filings cited by Bloomberg.
- • The UK Supreme Court ruling against Gerko and HFFX resulted in a tax liability of approximately £22.5 million ($30.6 million) concerning the taxation of deferred compensation arrangements from Gerko's time at GSA Capital Partners between 2010 and 2015.
- • HFFX ceased investing in 2015 when Gerko departed GSA to establish XTX Markets, which has since grown into one of the world's largest electronic market-makers, processing over $250 billion in daily trading volume across global financial markets.
- • The closure follows a challenging summer for the UK hedge fund industry, with Gerko's case being one of two major City tax disputes decided by the UK Supreme Court; Michael Platt's BlueCrest Capital Management separately lost a roughly £200 million case concerning trader compensation treatment through a limited liability partnership.
- • Gerko contended that the tax treatment amounted to significant double taxation on income earned during his junior years in finance, though he previously characterized the disputed sums as modest relative to the billions in taxes he has paid throughout his career.
Summary
Alex Gerko, the 46-year-old billionaire founder of quantitative trading firm XTX Markets, is proceeding with the voluntary closure of HFFX, the investment partnership that became the focal point of a protracted UK tax dispute. Company registry filings reveal the wind-down is underway, occurring approximately two months after the UK Supreme Court ruled against Gerko and the vehicle in June 2026. The Supreme Court's decision imposed a tax liability of £22.5 million ($30.6 million) on Gerko and other traders involved in the case, concerning the taxation treatment of deferred compensation arrangements.
HFFX operated during Gerko's tenure at London-based hedge fund GSA Capital Partners between 2010 and 2015. The fund ceased investment activity in 2015 when Gerko departed GSA to establish XTX Markets. Gerko's central argument throughout the dispute centered on claims that the tax treatment constituted significant double taxation applied to income earned when he held a relatively junior position in the financial industry. However, Gerko has previously stated that the sums at issue were modest relative to the aggregate billions of pounds in taxes he has paid during his career. A representative for Gerko at XTX declined to comment on the HFFX closure.
The Supreme Court ruling represents one of two significant City tax disputes adjudicated by the UK's highest court during summer 2026. Separately, hedge fund manager Michael Platt's BlueCrest Capital Management lost a substantially larger case valued at approximately £200 million, concerning the tax treatment of trader compensation distributed through a limited liability partnership structure. The dual decisions underscore heightened regulatory scrutiny on compensation structures within the hedge fund industry.
Since its founding, XTX Markets has emerged as a dominant force in electronic market-making globally. The firm processes in excess of $250 billion in daily trading volume across worldwide financial markets and has benefited materially from periods of elevated market volatility. The closure of HFFX represents a formal resolution to a legal and financial matter that has shadowed Gerko's otherwise highly successful track record in quantitative finance.
HFFX operated during Gerko's tenure at London-based hedge fund GSA Capital Partners between 2010 and 2015. The fund ceased investment activity in 2015 when Gerko departed GSA to establish XTX Markets. Gerko's central argument throughout the dispute centered on claims that the tax treatment constituted significant double taxation applied to income earned when he held a relatively junior position in the financial industry. However, Gerko has previously stated that the sums at issue were modest relative to the aggregate billions of pounds in taxes he has paid during his career. A representative for Gerko at XTX declined to comment on the HFFX closure.
The Supreme Court ruling represents one of two significant City tax disputes adjudicated by the UK's highest court during summer 2026. Separately, hedge fund manager Michael Platt's BlueCrest Capital Management lost a substantially larger case valued at approximately £200 million, concerning the tax treatment of trader compensation distributed through a limited liability partnership structure. The dual decisions underscore heightened regulatory scrutiny on compensation structures within the hedge fund industry.
Since its founding, XTX Markets has emerged as a dominant force in electronic market-making globally. The firm processes in excess of $250 billion in daily trading volume across worldwide financial markets and has benefited materially from periods of elevated market volatility. The closure of HFFX represents a formal resolution to a legal and financial matter that has shadowed Gerko's otherwise highly successful track record in quantitative finance.
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