Institutional broker Weeden Investors has acquired Saxis Group, a full-service prime brokerage business.
Under the terms of the agreement, Saxis Group becomes a wholly owned subsidiary of Weeden Investors and will continue to be led by its founder and CEO Sohail Khalid.
Founded in 2009, Saxis Group is a technology-powered prime brokerage business whose clients are mainly hedge funds and family offices. Some of its services include proprietary risk management and analytics technology (Armor), customisable trading applications (Razer), automated allocation technology and portfolio reporting.
A statement from Weeden said: “Saxis Group has forged deep relationships with investors who are ‘natural buyers’ of early stage and emerging hedge fund managers. These capital allocators, consisting largely of family offices, fund of funds, institutional and ultra high net-worth investors have contributed to the asset growth of many clients.”
“Investors may choose to leverage the separately managed account platform or invest directly into a client’s limited partnership. Investors also use the Armor risk management system provided by Saxis Group in order to manage risk and exposure levels on a real-time basis.”
“This is a key investment in, and a natural extension of, our product suite offering to the investment community. This effort will provide opportunities to cross-sell many quality products, including high-touch execution services and proprietary risk management products to a wider audience of hedge funds and investment advisors,” said Andrew Formato, president of Weeden & Co.
Lance Lonergan, co-CEO of Weeden & Co, said that the acquisition underscores his firm’s desire to invest in “cutting edge” technology and platforms, adding: “The combination of Weeden and Saxis will further our ability to provide exceptional services to our clients.”
Sohail Khalid, Saxis Group’s founder and CEO, said that the acquisition means that clients now have access to a greater range of products, including high-touch trading services, advisory services and better access to liquidity.
“This transaction allows Saxis Group to expand its proven technology and services platform to a broader set of asset managers and family offices who are seeking the best alternatives to grow their businesses.”
The deal follows a spate of prime brokerage acquisitions and some bankruptcies in the last few years.
In April 2010, ConvergEx purchased NorthPoint Trading, while Lighthouse Financial Group and its prime brokerage outfit filed for bankruptcy protection, with debts of $14.6 million, at the tail end of the same year.
FBR Capital Markets closed the shutters on its prime brokerage unit in 2011, after just 16 months of operation, but Wells Fargo Securities purchased Merlin Securities—a San Francisco- and New York-based prime brokerage services and technology provider—in April of 2012.
