June 11, 2018

By Samuel Agini

One of the world’s biggest electronic trading firms and several high-profile fund managers have backed the initial public offering of a City-based venue looking to challenge the dominance of leading players in Europe.

Aquis Exchange, the share-trading venue founded by former Chi-X Europe chief executive Alasdair Haynes, said on Monday that it is to list on London’s AIM later this week after raising £32m from investors.

The exchange, which has been valued at £73m by market capitalisation, has raised £12m for itself. The remaining funds raised go to the Warsaw Stock Exchange, which sold its 20% stake.

According to the admission document XTX Markets, the computer-driven electronic trading firm founded by Russian-educated mathematician Alex Gerko, has taken a 6.9% stake in Aquis, cementing ties between the two companies.

Nicola Beattie, the former head of market structure in Europe, Middle East and Africa for Bank of America Merrill Lynch, chairs both Aquis and XTX. Aquis relies on firms such as XTX to quote prices and provide liquidity on its venue. XTX, which is one of the biggest currencies traders in the world, behind only JPMorgan and UBS, according to the latest Euromoney survey, has also been expanding into equities.

XTX will be the second-largest shareholder after Rich Ricci, the former Barclays investment banker and long-term shareholder, who holds a 7.9% stake. The third, Miton Asset Management, is taking a 6.2% holding. AXA Investment Managers will own a 3.9% stake.

Among the remaining shareholders, Rathbone Investment Management is taking a 3.4% stake, Invesco Asset Management will own 3.3%, while Old Mutual Global Investors and Schroder Investment Management will each own 3.0%.

Aquis distinguishes itself from other exchanges through its subscription trading model, which is similar to paying a monthly fee for a set amount of smartphone data. It is a challenger to the likes of the London Stock Exchange and Cboe Global Markets in Europe. Financial News reported last month that Aquis was planning a June IPO.

Haynes is hoping to benefit from the EU’s revised Markets in Financial Instruments Directive. Them vast package of rules is designed to enhance investor protection and introduce stricter requirements on brokers and fund managers to route orders to venues that offer the best deal for end clients.

He said: “There is a clear regulatory drive for greater transparency in trading and a requirement for market-users to show they are using the best possible venue. Aquis is ideally positioned to capitalise on these trends in the years to come.”

Liberum Capital is corporate broker and bookrunner on the deal.