Foreign-exchange and fixed-income trading platform operator EBS BrokerTec plans to establish a greater foothold in the long-only asset management community via its acquisition of Molten Markets, according to company officials.
“EBS BrokerTec had been looking at the asset-manager sector very carefully and realized that one of the best ways to enter the space was to acquire Molten Markets,” said Simon Wilson-Taylor, head of institutional FX at EBS BrokerTec and former CEO and founder of Molten Markets. “It was the last piece of the pie in their strategy.”
Under terms of the deal, Molten Markets will be a wholly owned EBS BrokerTec subsidiary and integrate its InstiFX trading platform and Molten FX ECN into EBS BroketTec’s portfolio of existing offerings.
“For the moment we will keep the InfniFX and Molten FX platform names to describe the two products,” said Wilson-Taylor. “No doubt that will come up for review at some point.”
Wilson-Taylor describes the transaction as mutual beneficial to both companies where EBS BrokerTec gains a presence in a new market while Molten Markets benefits from EBS BrokerTec's size and reputation in FX market.
He downplayed the acquisition as representing yet the latest a part of a larger FX market consolidation trend.
There's a natural ebb and flow to acquisitions in this market, according to Wilson-Taylor.
“I led the Global Link and FXConnect business at State Street, the first multi-dealer client-facing FX-trading platform," he explained. "During my term at State Street, we also acquired several other business including Currenex. However, I feel that for the same reasons we thought Molten Markets needed to be acquired by a larger entity, other smaller companies have faced the same headwinds.”
However, Wilson-Taylor noted that for the same reasons why Molten Markets management felt the company needed to acquired by a larger entity in order to grow that other small companies have faced the same headwinds.
“Every company now looks at all of the risks when they enter into vendor relationships and one of them will always be operational risk regarding a partner’s size, scope and age.”
