ConvergEx continues spending spree with prime brokerage buy

US-based agency brokerage and technology firm ConvergEx has announced its third acquisition in less than two months with the purchase of NorthPoint Trading Partners, a prime brokerage and fund services company.
By None

US-based agency brokerage and technology firm ConvergEx has announced its third acquisition in less than two months with the purchase of NorthPoint Trading Partners, a prime brokerage and fund services company.

The acquisition will enable ConvergEx to offer small- and medium-sized hedge funds access to boutique prime brokerage services using NorthPoint’s high-touch service model and clearing and custody agreements. The deal is expected to close in the near future. Financial terms of the agreement were not disclosed.

“ConvergEx has well-established execution and technology relationships with many of the world’s large hedge funds and we understand the nuances of what hedge fund managers need to succeed. This acquisition is a natural extension to those relationships and enables us to offer smaller hedge funds wide-ranging services and expertise embedded in the high-touch service model that is so important to them,” said Joseph M. Velli, chairman and chief executive officer of ConvergEx Group, in a statement. “Additionally, as we integrate this new business line, NorthPoint’s clients will reap many benefits from leveraging ConvergEx’s state-of-the-art technologies and products.”

NorthPoint will continue to operate its Atlanta, Georgia office and all of the firm’s clearing and custody arrangements, products, partnerships and projects will continue uninterrupted. NorthPoint CEO Douglas M. Nelson and president Michael L. DeJarnette will continue in their current roles following the completion of the deal.

“In order to be competitive and thrive, start-up and mid-sized hedge funds need access to powerful and customised boutique prime brokerage services, and in the past they have had difficulty accessing these services through traditional prime brokerage arrangements,” said Nelson.

According to a recent report by consultancy TABB Group, small and mid-sized hedge funds outnumber larger hedge funds by 25 to one and boutique prime brokerage firms garner approximately 10% of all new prime brokerage arrangements.

ConvergEx agreed to buy Cogent Consulting, a supplier of commission management solutions to institutional money managers and broker-dealers, at the beginning of October and the US Transaction Services division of trading technology firm NYFIX, which includes the Millennium dark pool, two weeks ago.

«