Forex Club sells minority stake to Quadro Capital Partners, plans an IPO

Forex Club just announced that it sold a minority stake (believed to be in the region of 5-10%) to Quadro

Forex Club just announced that it sold a minority stake (believed to be in the region of 5-10%) to Quadro Capital Partners, a Moscow based private equity firm.

Forex Club is one of the largest and oldest brokers in the forex market and is the second largest broker in Russia.

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Quadro Capital Partners is a $1 billion fund that primarily targets financial services, retail, consumer goods and services, and sustainable natural resources in Russia and CIS. The fund is managed by Giedrius Pukas formerly a managing director at Troika Capital Partners (one of Russia’s largest private equity funds).

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Details of the deal were not disclosed but the funds will be used by Forex Club to fuel its growth in Russia and international markets as it would like to expand much beyond organic growth. Lately Forex Club launched its own Metatrader 4 offering and will now be competing with other MT4 brokers finally on same terms, including CFD. Forex Club will surely become much more aggressive in terms of marketing and online/offline presence.

This is the first private equity investment in a forex broker by a Russian fund and will probably mean that Forex Club be aiming to complete an IPO in the next few years as the investor would like to liquidate its investment at some point. FXCM and Gain Capital both completed an IPO in 2010, although share price is still lower than when floated. OANDA is another large forex broker backed by private equity looking to go public in the near future and Alpari too is said to be planning an IPO sooner than later.

Rafael Carrascosa, Forex Club’s CEO, had this to say when I asked him about this deal: ”Having Quadro Capital as our shareholder is another positive step in our development as a company and an endorsement of our strategic plans and business performance. We are delighted to bring to FOREX CLUB their expertise and views on the financial industry. And, without disregarding any of our other priorities, our principal focus right now is on building a set of financial service offerings that will enable us to establish lasting relationships with multiple segments of clients in several markets around the world.”

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