Nine Wall Street firms are to pay Thomson Financial $180 million to purchase a minority stake in electronic fixed income platform TradeWeb.
The dealing firms buying into the platform include Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, The Royal Bank of Scotland, and UBS. They say they will work alongside Thomson and re-invest in the business to create a global multi-asset class execution venue for clients.
The investment values TradeWeb at about $1.5 billion, triple the price at which Thomson originally acquired the business from its dealer-owners in 2004. The 2004 sell-off was sparked by regulatory concerns over potential conflicts of interest and competition issues in dealer-owned networks.
But with more deals shifting to electronic networks, trading volumes on the platform have soared from $26.2 trillion in 2004 to $51.2 trillion in 2006.
Lee Olesky, president of Thomson TradeWeb says of the deal: "At this stage in the evolution of the electronic markets, especially interest rate swaps, the partnership of leading dealers with TradeWeb's global distribution and technology, is a powerful combination. New investment by the dealers, and ongoing support from Thomson, position us uniquely to continue to work with the wider buy-side and sell-side community to expand our business."
Under the terms of the agreement, Thomson Financial will become a preferred distributor of TradeWeb's market data.