Merrill Lynch, Goldman Sachs, J.P. Morgan and Credit Suisse have taken a minority stake in FTEN, a US-based provider of high-frequency trading, market data risk management and compliance technology. The size of the stake was not disclosed, but FTEN said it will retain its independence and neutrality.
For J.P. Morgan, the investment is part of its strategy to expand its Electronic Client Solutions (ECS) offering to statistical arbitrage hedge fund clients by providing them with FTEN’s high-speed trading and risk management tools.
“FTEN’s market-leading technology solution, coupled with J.P. Morgan’s prime brokerage product, will provide our clients with a turnkey execution and financing solution to access global markets,” Antonio Reyes Miras, managing director, ECS, told theTRADEnews.com.
J.P. Morgan became a top-three prime brokerage following its purchase of Bear Stearns in June. “We are now looking at exploiting all the ECS opportunities that the prime brokerage franchise brings to the table,” said Reyes Miras. “This includes deploying our own execution management system globally, which was up until now only deployed in the US, and building a global execution and financing product,” He added.
The banks’ investment will allow FTEN to expand more rapidly in Europe and Asia. FTEN’s technology currently processes more than 20% of the US daily equities volume and risk management calculations.
“This investment and the partners behind it allow FTEN to significantly accelerate our global expansion because we are no longer limited by organic growth to finance expansion throughout European and Asian markets,” said Ted Myerson, president and founder of FTEN, in a statement.