US investment bank Rodman & Renshaw is launching an electronic transaction platform that bypasses brokers, connecting issuers straight to investors seeking access to initial public offerings.
Rodman's DirectMarkets will let issuers sell shares directly into the secondary market, where investors can contact issuers and indicate their interest. The new platform is due to make its debut in early March 2012.
DirectMarkets will be led by former Liquidnet chief information officer and founding member Kevin Lupowitz. The new platform will let investors accumulate stock positions more cost-effectively than through ongoing open market purchases and bring greater efficiency to the methods public companies use to raise capital, including follow-on offerings, registered directs, at-the-markets, confidentially-marketed public offerings and private investments in public equities.
The platform provides execution and order management system integration for primary offerings, as well as workflow management tools for complex transactions beyond the standardised offerings of common stock at an agreed price. Another proposed benefits of the new platform is the automation of the closing process for capital markets transactions.
“DirectMarkets will be a game-changer and with Kevin Lupowitz’s talent and experience at the helm, this new electronic transaction platform is the catalyst that will redefine Rodman as an innovative technology company focusing on the financial services industry, while strengthening our legacy business,” said Edward Rubin, CEO of Rodman & Redshaw.
In conjunction with the launch of DirectMarkets, Rodman intends to change its name to Direct Markets Holdings, subject to stockholder approval at its annual meeting on 4 May. The firm’s sales and trading and investment banking operations will continue to be conducted under the Rodman & Renshaw brand name.