CFH Group is already known as having one of the widest product reaches in the forex industry with its multiple units of operations. Within the Group includes its clearing division, prime brokerage, risk management solution, and broker technology services.
In addition, CFH Group owns the app-based platform Tradable, and recently took a majority equity stake in trading related marketing firm Tradimo.
Continuing that foundation, CFH Group has announced that it is launching a funding initiative to invest in and partner with B2B technology firms and STP brokers that have a presence in the institutional sector and yearly revenues of between $5-$30 million.
The investing program comes as CFH Group has announced today that former CEO and Chairman of Citi Venture Capital International, Dipak Rastogi has been appointed to the company’s board. A private equity veteran, as well as have headed trading departments at Citi, Rastogi is expected to become an active board member, providing deal making experience for CFH Group’s investment initiative.
Speaking with Christian Frahm, CEO, CFH Group, he explained to Forex Magnates that several factors have led to the funding initiative.
First, they had done several investments and expanded their offerings and want to continue scaling their business. Secondly, Frahm added that “with Dipak coming on board, he gives us access to capital and experience to complete deals”. Last, with the events of Black Thursday, they expect consolidation within the industry to take place.
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As a result, the combination of these factors led CFH Group to believe that there is an opportunity for them to continue to scale their operations through partnering and investing in other players in the market.
In regards to providing investment, Frahm explained that prior to today’s announcement, they have already been approached by various industry firms that were looking for funding and assistance. Frahm believed that there are a lot of quality businesses that simply had bad luck. As such, investing in what they view as quality provides an opportunity for CFH Group.
Describing the types of STP brokers they are interested in investing in, Frahm noted they are interesting in retail forex brokers, but who also have an institutional unit of their own. This would include companies that are also servicing B2B customers by providing STP liquidity or technology.
Frahm also added that the industry is experiencing a period where banks are limiting who they service. As such, they see a situation where there are brokers that need additional capital or partners to allow them to continue to be able to access their existing liquidity relationships.
Overall, Frahm concluded that their goal is to create partnerships where they “find a fair way to offer mutual ground for both sides, where everyone benefits from the investment”.
In addition to Frahm’s comment to Forex Magnates, in the public statement about the news, Dipak Rastogi highlighted the opportunities in the market for CFH Group following Black Thursday as he commented “Every time you see a market event like the Swiss National Bank announcement it offers a major opportunity for someone to step up and take leadership. CFH has built a truly impressive business, with phenomenal growth particularly over the last three years. I have been thoroughly impressed with the team, the technology and the quality of the organization overall. I view CFH as an excellent vehicle for partnering and investing in other leading companies, creating a larger group where the sum becomes much more valuable than the individual parts. Having completed numerous deals in the financial sector during my 30 year career at Citi, I look forward to bringing my experience and network to help CFH take the lead in consolidating the industry.”