MarketAxess Holdings Inc. announced on Tuesday that it will acquire LiquidityEdge, which runs an electronic system for trading U.S. Treasuries. The deal, valued at $150 million, is expected to close in the fourth quarter.
MarketAxess operates an electronic trading platform for fixed-income securities and provides market data and post-trade services.
LiquidityEdge offers a trading system that lets dealers, market-makers and institutional investors trade in the U.S. Treasury market, which averages about $500 billion in daily volume. Started in 2015, LiquidityEdge also offers custom liquidity pools and direct dealer streaming capabilities for on- and off-the-run Treasuries.
In conjunction with MarketAxess' global trading network of over 1,600 institutional participants, this acquisition is also aimed at global fixed-income market participants.
“Through the acquisition of LiquidityEdge we are bringing rates trading capabilities to MarketAxess to complement our leading position of electronic trading in the global credit markets,” said Chris Concannon, president and COO of MarketAxess. “This will not only enhance the trading experience for our dealer and institutional investor clients, but also offer a truly innovative solution for dealers to stream U.S. Treasury quotes to a tailored audience.”
MarketAxess also announced the expansion of hedging capabilities to include Treasury hedging for its credit products using LiquidityEdge's technology infrastructure and liquidity network.
Targeted to launch in the fourth quarter, this will let a client simultaneously hedge a credit spread transaction within the same workflow, maximizing efficiency and reducing rate movement risk, the company said. The partnership with LiquidityEdge will add Treasury net hedging capabilities for aggregated sets of corporate bond trades.
“Across a few short years, LiquidityEdge has grown to become one of the leading marketplaces to trade U.S. Treasuries,” said Nichola Hunter, chief executive of LiquidityEdge. “Offering an alternative to incumbent trading protocols, LiquidityEdge continues to record daily highs in excess of $25 billion.”
