Marex to acquire Cowen’s prime brokerage and outsourced trading business from TD

Back in June, TD Bank Group and Cowen had announced that the prime brokerage and outsourced trading businesses were parting ways just months after the deal was completed, seeking a more ‘strategically and geographically aligned’ partner.

Cowen’s prime brokerage and outsourced trading business has been acquired by Marex just six months after TD completed its purchase of the business.

The transaction is expected to close at the end of the year, pending regulatory approval and customary closing conditions.

The operations acquired will be 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).

Following the acquisition, both businesses will continue to be led by Jack Seibald and Michael Rosen.

Speaking in an announcement Ian Lowitt, chief executive of Marex, said: “This transaction advances our strategy, increasing our capabilities to connect clients to markets in new ways across multiple geographies. Mike and Jack have built a terrific business, and its addition to Marex broadens the range of essential infrastructure we provide to clients, as well as creating opportunity for Marex to provide additional services to a new set of clients. Expanding our capital markets business also adds to our diversification and to the resilience of our franchise.” 

Read more: Fireside Friday… with Cowen’s James Baugh

The TD deal for Cowen was completed in March this year, but just months after their merger, it was announced that the prime brokerage and outsourced trading division would diverge from TD Bank Group on mutually agreed terms.

At the time, sources close to the matter revealed that the businesses had sent a communication to clients confirming the divestment, highlighting that it was “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.

TD Bank Group completed its all-cash $1.3 billion acquisition of Cowen in March – following an initial announcement in August 2022. The plan was to create an integrated North American dealer to significantly advance its growth strategy in the region, specifically through the addition of Cowen’s US equities sales trading, execution, and research offering. 

TD will continue to operate its own prime services business despite the Cowen spin-off. 

Earlier this year, TD also confirmed that Cowen Digital was shuttering two years after its launch. 

In a communication seen by The TRADE – signed off by 11 team members including managing directors – the importance of “trusted counterparties who understand the needs of institutional investors” was emphasised. The memo also highlighted that it was necessary for the unit operate from “a different home” going forward.

In an announcement today, Dan Charney, vice chair of TD Cowen and co-head of global markets, said: “The divestiture of Cowen Prime was planned as part of the acquisition of Cowen by TD earlier this year. As TD continues to focus its efforts on growing TD Securities Prime Services, we are pleased to have found a great home for Cowen’s legacy Prime Services business in Marex, bringing significant opportunities for both businesses.”