September 11, 2009

Barclays Capital (BarCap) has taken a minority equity stake in Tradeweb, the electronic network for global fixed-income and derivatives trading. The amount paid by BarCap and the percentage ownership was not disclosed. In connection with the transaction, Thomson Reuters and its dealer-owners will invest an additional $68 million in total, reinforcing their commitment to Tradeweb's electronic markets, according to the release.

Tradeweb's combined business is majority-owned by Thomson Reuters, along with 10 active dealer-owners. In total more than 35 dealers provide liquidity to Tradeweb's online fixed income and derivatives markets.

Thomson originally acquired Tradeweb from its dealer owners in May of 2004 for $385 million with contingent payments of $150 million over the next three years based on growth targets. The sale was triggered by regulatory concerns over conflicts of interest and competitive issues with dealer-owned networks, reported Finextra.

However in 2007, due to soaring trading volumes on the platform, the dealers paid $180 million to buy back in, acquiring a minority stake that valued the company at $1.5 billion, triple the amount that Thomson originally paid, according to Finextra's story. At that time, Thomson said Tradeweb would expand into multi-asset class trading.

BarCap becomes the 10th investment bank to own a stake in Tradeweb, joining Bank of America/Merrill Lynch, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Morgan Stanley, RBS and UBS.

"Partnering with Tradeweb underscores the firm's commitment to delivering best-in-class service, liquidity and reliability in the electronic trading space to our clients," stated Harry Harrison, head of rates at Barclays Capital. "Our stake in Tradeweb also complements our strategy for improving market efficiency and transparency alongside our market-making electronic trading platform, BARX," Harrison stated in the release.

BarCap is a liquidity provider for 14 markets on Tradeweb, and has a leading position in online trading established over many years, stated Lee Olesky, CEO of Tradeweb in the release.

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Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in ...