LMAX Exchange unveils management buyout
FX Week, December 2012 – The management team of London-based foreign exchange and metals multilateral trading facility (MTF) LMAX Exchange has agreed to buy a majority stake in the venture from its parent Betfair, the online sports betting company.
The management buyout, which was announced on December 13 but is still subject to regulatory approval, will leave Betfair retaining a 33% stake in the company while the management team, led by chief executive David Mercer, will own a majority stake. The buyout coincides with a decision by Betfair’s management to streamline the group and focus on its core competencies.
“Betfair is a gambling company, and has to focus on its core business going forward. It has helped us get to where we are – its legacy of quick, robust, scalable technology is what helped create LMAX Exchange. However, our new status as an employee-owned company gives the business the required flexibility to rapidly grow and evolve,” says Mercer.
Founded in 2010, LMAX Exchange initially sought to compete with large retail brokers but refocused its strategy after Mercer was appointed chief executive in April 2011 (www.fxweek.com/2199328). Regulated as an MTF by the UK Financial Services Authority, the platform uses an exchange model to execute spot FX and prides itself on the strength of its underlying technology, its speed and its transparency.
“The LMAX Exchange business has great momentum. As a result, and as a long-standing passionate advocate of the exchange model, I am very excited to be part of the team buying the business and look forward to it going from strength to strength in the next couple of years,” says Ed Wray, co-founder of Betfair and one of the private investors backing the management buyout.
Now 16 months into a fully funded three-year business plan, LMAX Exchange has seen seven quarters of consecutive growth, the firm said in a statement yesterday. Expanding from FX spot and metals into non-deliverable forwards and swaps is also a component of its long-term strategy, Mercer adds.
“We’ve built real momentum and traction,” says Mercer. “We started at a low base but we’ve been growing at 20% a month, when everyone else has been declining. We’re trying to create a greater presence, to become one of the premier venues and the only FX venue without ‘last look’ as standard for all market participants. We’ve got the product right; we’ve got the liquidity right; and we’ve got a fantastic technology platform. So all the building blocks are there, we just need to build out our distribution. We’ll be looking to extend our geographic coverage and product segments.”
Geographically, Mercer feels the platform is gaining significant traction in Asia- Pacific and he intends to invest further in the region. North America is also a natural region for expansion, as the platform’s MTF status is likely to help it gain a licence to operate as a swap execution facility under the US Dodd-Frank Act. Within three to five years, Mercer believes LMAX Exchange will be truly competing with the incumbent platforms in the FX market.
“We have a clear strategy and roadmap to build LMAX Exchange into a leading FX venue globally in three to five years. I think clients are looking for the execution you get on-exchange, so I hope we have that point of differentiation. If you look at the rest of the volumes in the marketplace, hopefully our results show that our unique differentiator has come to the fore,” says Mercer.
View the FX Week article online or download as a PDF –
For further information please contact:
LMAX Exchange (London):
Barbara Pozdorovkina T: +44 20 3192 2510 E: [email protected]
About LMAX Exchange
LMAX Exchange Group is a dynamic, visionary and award-winning financial technology company. Recognised as one of the UK’s fastest growing technology firms, LMAX Exchange is leading the transformation of the global FX industry to transparent, fair, precise and consistent execution. Operating one global marketplace for trading FX, metals, indices and commodities, LMAX Exchange delivers open access, transparency and a level playing field to all market participants.
LMAX Exchange Group offers all clients the ability to trade on LMAX Exchange central limit order book, driven by streaming no ‘last look’ limit-order liquidity from top tier banks and non-bank financial institutions. Servicing funds, banks, brokerages, asset managers and proprietary trading firms, LMAX Exchange offers an anonymous, regulated, rules-based trading environment, order execution in strict price/time priority, and access to real-time streaming market and trade data, enabling all market participants to control execution quality and total trading costs.
Offering a comprehensive range of instruments and ultra-low latency execution, LMAX Exchange operates a global FX exchange infrastructure with matching engines in London, New York and Tokyo.
LMAX Exchange - a unique vision for global FX.
Financial technology awards:
2017 Best FX Trading Venue - (ECN/MTF) – Fund Technology and WSL Awards more
2016 Best Trading & Execution Technology – HFM US Technology Awards more
2013 Best Overall Testing Project – The European Software Testing Awards more
2011 Best Trading System – Financial Sector Technology Awards more
FX industry awards:
2017, 2016, 2015, 2014, 2013 Best FX Trading Venue - (ECN/MTF) – WSL Awards more
2017, 2016, 2015, 2014, 2013 Best Margin Sector Platform – Profit & Loss Readers' Choice Awards more
2017, 2013 Best Execution Venue – Forex Magnates Awards more
2014 Best Infrastructure/Technology Initiative – WSL Institutional Trading Awardsmore
Business growth awards:
2016, 2015 Winner – Deloitte UK Technology Fast 50 more
2016, 2015 Winner – Deloitte EMEA Technology Fast 500 more
2015, 2014, 2013 Fastest Growing Tech Company in the UK – The Sunday Times Tech Track 100 more
LMAX Exchange Group is the holding company of LMAX Limited and LMAX Broker Limited.
LMAX Exchange is a trading name of LMAX Limited, which operates a multilateral trading facility, authorised and regulated by the Financial Conduct Authority (firm reference number 509778) and is a company registered in England and Wales (number 6505809).
LMAX Global is a trading name of LMAX Broker Limited which is authorised and regulated by the Financial Conduct Authority (firm reference number 783200) and is a company registered in England and Wales (number 10819525).