The popular Forex broker, FXCM (and one I use for two of my Managed Forex Accounts), has just announced a change in its corporate ownership structure. Read the full news release below:
New York, December 3, 2007 — Today, Forex Capital Markets LLC (FXCM) announced that the Refco estate agreed to sell its 35% ownership interest in FXCM to Long Ridge Equity Partners (and affiliated entities) and Lehman Brothers. The financial terms of the transaction were not disclosed.
The announcement of the sale was made today by Drew Niv, CEO of Forex Capital Markets LLC (FXCM), the Wall Street currency trader.
“We are extremely pleased with the outcome of the auction,” said Niv, “and we look forward to Lehman Brothers and Long Ridge becoming shareholders in FXCM. We believe Lehman Brothers’ expertise in the global foreign exchange market and insight into growing our business will be extremely beneficial both for our company and for our clients.”
Upon completion of the transfer of ownership:
FXCM will no longer have any financial connection or business relationship with the Refco estate;
Five investors, including Long Ridge FXCM, L.P. and Long Ridge FXCM Coinvestment, LLC, are purchasing 25.1%. Lehman Brothers has agreed to acquire an equity stake of 9.9%.
The FXCM Board of Directors will be composed of seven members. Five seats will be held by original founders of FXCM and two will be held by members nominated by the new investors excluding Lehman Brothers;
There will be no change in FXCM’s management, operations or services.
Refco Exits As A Shareholder
“As a result of the transfer of ownership, the Refco estate will have no equity stake in FXCM,” said Niv. “Replacing Refco as a shareholder will be a positive in the marketplace, enabling the industry and individual traders to focus on FXCM’s strong financial position, its growing business and its product innovations.”
No Change In Leadership Or Management
“The results of the auction will change neither the leadership nor the management of FXCM,” said Niv. “The investment being purchased constitutes a minority interest in FXCM. The original founding partners of FXCM still control a majority of 5 of the 7 seats on our Board of Directors, and will collectively make all major decisions. The new investors are fully in sync with management’s plans, so FXCM will not be making any changes in personnel, operations, or strategic direction as a result of the auction.”
A Vote Of Confidence For The No Dealing Desk Model
“The no-dealing-desk trading platform we have developed allows currency traders to receive prices provided to FXCM, from some of the world’s largest banks, who, offer us some of the most favorable rates. We believe this business model points the way for all retail currency trading in the future,” said Niv.
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Forex Capital Markets LLC is one of the Largest Forex Dealer Members*
More than 90,000 live accounts are traded on the FXCM trading platforms
Over $200 billion in notional volume is traded each month on the FXCM trading platforms
FXCM provides customer support with native speakers in more than a dozen languages in 6 offices around the world
Registered with the CFTC as a Futures Commission Merchant, FXCM (Forex Capital Markets LLC) has received numerous awards from the investment community, including Best Currency Broker from Shares, Best Retail Foreign Exchange Platform from FX Week and Best Foreign Exchange Specialist from Technical Analysis of Stocks & Commodities. In addition to currency trading, FXCM offers educational courses on forex trading, and provides research through DailyFX.com.
*In September 2006, FXCM held in excess of $215 million in customer funds out of a total of over $770 million held by Forex Dealer Members. While there are approximately 31 active Forex Dealer Members with liabilities to customers of approximately $795 million, FXCM holds approximately 1 out of every 3 dollars of customer funds held by Forex Dealer Members.
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Long Ridge Equity Partners (Long Ridge Equity Partners) is a private equity firm. Founded in 2007, its primary focus is transactions in later-stage financial services companies with established revenue streams, profitable business models, and strong management teams. An active, long-term investor in businesses, Long Ridge creates value by contributing financial, strategic, technical, and operational resources. Its contributions take a variety of shapes and forms, including developing and implementing growth strategies; identifying sales opportunities; evaluating and consummating acquisitions; building management teams; and raising capital.