ConvergEx, a provider of investment and execution technology to institutional clients, has acquired NorthPoint Trading Partners. With this acquisition, ConvergEx will be able to offer small and medium sized hedge funds access to introducing prime broker services through NorthPoint's clearing and custody agreements. The deal is expected to close in the near term. Financial terms of the agreement were not disclosed, according to a statement from ConvergEx.According to a recent TABB Group report, it is estimated that the number of funds in the small to mid-sized hedge fund segment exceeds the count in the larger hedge fund segment by 25 to 1 and that introducing or boutique prime broker firms garner approximately 10% of all new prime brokerage arrangements. NorthPoint is a provider of boutique prime services and is known for its solutions, experience and industry veterans.
"ConvergEx has well-established execution and technology relationships with many of the world's large hedge funds and we understand the nuances of what hedge fund managers need to succeed," said Joseph M. Velli, chairman and CEO of ConvergEx Group, in a press release. "As we integrate this new business line, NorthPoint's clients will reap many benefits from leveraging ConvergEx's state-of-the-art technologies and products."
Douglas M. Nelson, chief executive officer of NorthPoint, and Michael L. DeJarnette, NorthPoint's president, will continue in their respective roles at ConvergEx. "NorthPoint offers services that are very much in high demand. In order to be competitive and thrive, start-up and mid-sized hedge funds need access to powerful and customized boutique prime brokerage services, and in the past they have had difficulty accessing these services through traditional prime brokerage arrangements," said Nelson, in a statement. "We are all thrilled to have joined the ConvergEx family. Together we believe we can offer the next generation of boutique prime brokerage services."
NorthPoint will continue to be based out of Atlanta, and all of its clearing and custody arrangements, products, partnerships and projects will continue uninterrupted.Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio