Interactive Brokers Group, Inc. (NASDAQ: IBKR) has entered into a definitive agreement to acquire online investing market place, Covestor, according to an Interactive Brokers statement. The story was first revealed on Wednesday as initial details of the acquisition were covered in Finance Magnates review of Interactive Brokers post-earnings statement conference call and their explanation of Covestor’s services being part of an overall new product focus.
The terms of the deal were not disclosed as yet, however the transaction has been formally approved by the respective boards of Interactive Brokers and Covestor. Both parties are targeting a Q2 2015 closing date on the deal. The acquisition will help fortify and expand Interactive Brokers’ position as a global leading platform for electronic trading and investing.
Covestor is a pioneer in the online investing business, and the first digital asset management company to offer both active and passive investment options. Interactive Brokers is a major automated global electronic broker offering trading on over 100 electronic exchanges and trading venues around the world. The acquisition solidifies and expands Interactive Brokers’ position as the leading platform for electronic trading and investing.
According to Covestor CEO Asheesh Advani in a recent statement on the agreement, “Covestor brought the convenience, transparency and cost comparison capabilities that online marketplaces provide to the financial services sector.”
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“We developed our marketplace so that people could easily search for, compare and select investment strategies from multiple money managers. We are now joining Interactive Brokers’ marketplace to bring more products to more people around the globe,” he added.
“This acquisition increases our ability to rapidly add more portfolio managers to Covestor’s marketplace, provide additional asset classes to clients, and expand our offerings globally,” noted Steven Holstein, Covestor’s Chief Marketing Officer in an accompanying statement.
According to Interactive Brokers’ Chairman and CEO Thomas Peterffy, “We are creating a marketplace that brings investors, wealth managers and money managers together. The acquisition of Covestor is a positive development toward making Interactive Brokers the premier global platform for investors, advisors, hedge funds and money managers to find each other.” Milan Galik, President of Interactive Brokers, also added, “this development will enable us to further refine our platform to provide a more complete service to robo-advisor companies in general.”
Earlier this week, Interactive Brokers made headlines after announcing its financials for Q1 2015, and reported a $13 million loss for the quarter, compared to a gain of $19 million in the same period in 2014. Causing the loss was a $121 million hit the broker took due to non-collectible accounts from negative balances after January’s Swiss franc volatility.