JC Flowers to buy Chi-X's Asia trading platforms
J.C. Flowers has agreed to buy the Australia and Japan businesses of Chi-X Global Holdings, an alternative equity trading platform that competes with primary exchanges, as well as the company’s Hong Kong-based technology services unit.
Financial terms were not disclosed. Coming shortly after a deal was struck with NASDAQ to sell Chi-X Canada - which handles 22% of the order flow of TSX Composite Index securities in the country - Chi-X is poised to exit all of its local platforms. Chi-X Europe was sold in 2011 for $365 million.
Chi-X was launched by Instinet, one of the first over-the-counter exchanges. Chi-X Europe went live in 2006, when Instinet was owned by Silver Lake. The following year it was sold to Nomura. Having expanded into Australia, Japan and Canada, in 2011 Chi-X Global was spun-out into an entity controlled by Instinet, Bank of America, Goldman Sachs, Morgan Stanley, UBS, Getco and Quantlab Financial.
All the Chi-X platforms are intended to provide a more efficient and cost-effective securities trading system, with a view to attracting new investors, boosting market volumes and reducing transaction costs. This is delivered through innovative pricing, new order types, and additional risk management tools.
"The Chi-X businesses have established themselves as successful and innovative alternatives to primary exchanges," Thierry Porte, managing director at J.C. Flowers & Co, said in a statement.
"Their superior technology, service and trade execution performance will continue to drive positive change and improve markets where they operate. We hope to accelerate this growth through continued enhancements to the platform, including new investment products and markets, and by leveraging our strong relationships throughout the Asia Pacific region."
US-based J.C. Flowers focuses exclusively on global financial services and has been active in Asia for nearly two decades, most famously taking over the distressed Long-Term Credit Bank of Japan and re-launching it as Shinsei Bank. The firm also has investments in Korea's KT Capital Corporation and Sicom in India.
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