Major Brokers Take Stakes in Chi-X Global

Five broker-dealers and trading software vendors have taken minority stakes in alternative trading systems (ATSs) operator Chi-X Global.

Bank of America Merrill Lynch, Getco, Goldman Sachs, Morgan Stanley, and QuantLab Group have all taken equity in Chi-X Global Holdings, the holding company for Chi-X Australia, Chi-X Canada and Chi-X Japan. Japanese bank Nomura remains the majority stakeholder in the group. 

This is the second time Chi-X Global has syndicated minority stakes in its ventures. In 2008, BNP Paribas, Citadel, Citi, Credit Suisse, Fortis, Getco Europe, Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley, Optiver, Société Générale and UBS all became minority shareholders in the Chi-X Europe multilateral trading facility (MTF).

"The investment that our equity partners have made today demonstrates their commitment to Chi-X Global and its businesses," says Tal Cohen, CEO of Chi-X Global. "With the support of our investors, Chi-X Global is well positioned to continue its growth and remain a positive force for change through market innovation and the introduction of competition."

SST Analysis:
The terms of the deal were not disclosed, but the inclusion of Getco and rival QuantLab, in particular, is interesting. With unrest and the advent of new regulation due in Europe and the US, investors are increasingly looking to emerging markets and Asia in particular for diversification opportunities. The upcoming launch of Chi-X Australia, scheduled for a soft go-live on October 31, and introducing competition into that country's equities market, has received much attention of late.