Update: As written below, on Wednesday we published that FXCM was rumored to be in talks with Infinium Capital Management about taking an equity stake in the firm. At the time, FXCM stated that they have “no comment” on the matter. After markets closed yesterday, FXCM issued a public statement saying that they confirm they have had discussions with Infinium as they commented “At any given time, FXCM has discussions with various businesses regarding a range of different business relationships. FXCM can confirm that Infinium is one of those businesses. However, at this time, there is no material information to disclose.
According to the Wall Street Journal, FXCM is rumored to be a possible acquirer of privately owned Infinium Capital Management. The Chicago based high frequency trading is a market maker in OTC and exchange based assets, providing liquidity for the energy, agricultural, FX, precious metals, equity index, and fixed income market. The WSJ sources attribute the talks between the two companies based on Infinium’s looking for partners as they seek additional capital for their operations. In addition, Reuters reported that last month, Co-Founder George Hanley came out of retirement to lead the company. His return, along with rumors of the firm seeking partners, presents that the company may have been struggling due to declining HFT volumes on US exchanges over the past twelve months.
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For FXCM, Infinium would follow a similar path to their acquisition of controlling stake in Lucid Markets, a non-bank market maker to the FX industry. However, Infinium would also bring FXCM exposure to non-FX assets, which the broker conducts minimal business in. When asked about a potential tie-up, Jaclyn Klein Vice President Corporate Communications and Investor Relations at FXCM answered that the firm has no comment at this time. However, the company hasn’t been shy about expressing that they have a strong cash position and are exploring acquisition alternatives in both the retail and institutional space. Although on their latest conference call FXCM CEO Drew Niv focused on the potential of retail related M&A, the success of the Lucid Markets deal points that institutional market making is an area they would be interested in.