Goldman Sachs has announced that they have sold a majority interest of REDI, the technology provider of the REDIPlus trading platform to a consortium which includes BoA Marrill Lynch, Barclays, BNP Paribas, Citadel and Lightyear Capital. Following the sale, Goldman Sachs will retain a “significant minority equity stake.”
For REDI and its REDIPlus platform, the firm has evolved since its initial roots as a NYSE listed equity trading platform. Launched by NYSE Specialist firm, Spear Leads and Kellog (SLK) in 1992, REDIPlus became a popular platform among day trading firms during the 90’s as electronic trading in equities became more readily accessible. Using REDIPlus, traders could access the NYSE’s ‘super dot’ electronic trading network to trade directly with the exchange. The platform competed with similar products from firms such as ABN Amro as well as proprietary systems. With the rise of interest for NASDAQ securities, SLK integrated the ability to trade both listed and OTC equities on one platform and was an early adopter of such a feature.
In 2000, SLK was acquired by Goldman Sachs, which put the platform in the hands of the investment bank. At Goldman, REDIPlus was expanded to include options and futures trading capabilities and became the firm’s electronic trading platform that was offered to both customers and used in-house. The platform continued to add asset coverage to include global equities, options, and futures. In terms of FX, Goldman developed REDITrader as its Single Dealer Platform, integrating liquidity, proprietary research and algo trading features within the single interface.
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In 2012, Goldman began to separate the REDI operations, and have it serve as an independent company. While multi-broker connections were available prior to the reorganization, the 2012 shift paved REDI’s path to become a true ‘broker-neutral’ trading platform with the recent sale solidifying that move. The inclusion of banks and private equity investors points to both an established network for REDI to market to, as well as access to capital for operational development. The independent REDI is headquartered in NYC, with regional offices in Boston, San Francisco, Chicago, London and Hong Kong. Rishi Nangalia, who previously co-managed the Goldman Sachs Electronic Trading Business Development group, will serve as the company’s Chief Executive Officer.
On the news, Nangalia stated “Our team understands the needs of the investment community and remains passionate about delivering technology solutions that will drive the industry forward,” said. “Our clients are at the core of everything we do and we look forward to continuing to develop our community of investors, brokers and content providers.”
Also commenting on the sale was Darren Cohen, global co-head of Principal Strategic Investments at Goldman Sachs, who said “We are pleased to assemble an impressive consortium of market-leading participants to support the further growth of the REDI business and expand its reach to more clients, geographies and asset classes. The new independent REDI is a strategic initiative for Goldman Sachs and the firm is committed to its future success as a separate, multi-dealer platform.”