Commodities specialist Marex has completed its acquisition of TD Cowen’s outsourced trading and prime brokerage business, first announced in September.
The business has been rebranded as Marex Prime Services and Market Outsourced Trading, with both becoming part of the Marex Capital Markets business – formed last year following the acquisition of ED&F Man Capital Markets.
The businesses will offer services across multi-asset-class custody, high and low touch execution, financing solutions, securities lending, and related technology solutions, and capital introduction.
Jack Seibald and Mike Rosen
While Marex and formerly TD Cowen’s outsourced and prime businesses have zero overlap in terms of client base, Jack Seibald and Mike Rosen, now co-heads of Marex Prime Brokerage Services and Outsourced Trading, said the acquisition would allow the two firms to leverage each other to expand on their existing offerings and explore moving into new ones.
Rosen and Seibald have been with the business since its inception in the ’90s, selling it to Cowen in 2015. TD Bank Group then agreed to acquire Cowen in August 2022.
“The cross collaboration and working with all of the other business units is one of the biggest opportunities. It’s something that we learned to do quite well when we got to Cowen and we had a lot of success with working with different product lines,” Rosen told The TRADE.
“It’s going to be very interesting for us because at Marex there’s a whole host of business that we haven’t been exposed to. There’s an opportunity for each party to bring their skillset to each client base and go broader and deeper with all of our collective clients.”
News broke of their split with TD in June earlier this year, reportedly concluding it would be in the best interests of clients if the prime brokerage and outsourced trading business were divested to a partner more “strategically and geographically aligned” to the platform.
“It became very clear early in the process that the business that we run which is a global prime brokerage and outsourced trading business largely focused on emerging and mid-tier hedge fund managers was not a business that was consistent with TD business plan or risk appetite and parameters,” Seibald told the TRADE.
“Rather than trying to fit a square peg into a round hole we collectively agreed there might be an opportunity to market the business in its entirety to other interested parties for whom the business aligns with their strategic priorities and risk appetite. To TD’s credit they gave us that opportunity.”
The Marex deal was later confirmed in September. When asked why they had selected Marex, a commodities focused with very little capital markets focus, Rosen and Seibald told The TRADE it was essential that a new parent company was committed to expansion and took on their business as a whole.
Read more – Marex to acquire Cowen’s prime brokerage and outsourced trading business from TD
Around 153 people are coming over from TD Cowen to Marex as part of the transaction across the US, London and Hong Kong and Belfast.
“Our objective was to keep the business and all the people in its entirety in place. Finding a partner that was sensitive to that notion and agreed with it to take on the whole business on a global basis was an important element in structuring any deal with anyone,” Seibald said.
“From our perspective, the opportunity is bringing to Marex a set of capabilities in traditional securities that’s pretty far advanced. Marex brings a substantial presence in futures, commodities and a global footprint that will allow us to take our business to a broader audience.”
“This is not the first time the business has been sold – it’s always important to brand the business as one so that there’s a clear understanding by clients that there’s a whole firm behind an offering and we aren’t a conglomerate of disparate businesses. Delivering the centralised message is easier and better if its utilising one name,” Seibald added when asked about the change in branding.
One such potential area for collaboration is offering commodities exposure to the firm’s existing energy hedge fund clients that already trade equities. Marex also has a presence in Asia and in the Middle East that TD Cowen’s outsourced and prime business did not formerly have access to.
Seibald and Rosen confirmed prime services and outsourced trading will be central to their focus going forward from the transaction.
“Philosophically, we were very much aligned with Marex in terms of it being entrepreneurial, in terms of customer base, in terms of desire for growth. On all of those fronts they certainly tick the box and that makes the opportunity exciting to us,” Rosen concluded.