Dec 09, 2014

    Temasek to 'buy stake' in US high-speed trading firm Virtu

    TEMASEK Holdings will pay about US$180 million (S$238 million) for a minority stake in Virtu Financial, the United States high-speed trading firm that postponed an initial public offering, according to a person familiar with the transaction.

    Singapore's state-owned investment company will purchase a portion of the equity investment held by Silver Lake Partners, Virtu said in a statement yesterday. The statement did not give a price.

    Temasek bought about a 10 per cent stake, another person with knowledge of the transaction said who did not want to be named, as that information is private. Aedan Lai, a Temasek spokesman, declined to comment.

    Virtu shelved plans to go public this year amid the furore caused by Michael Lewis' book Flash Boys, which portrayed high-speed traders, Wall Street brokerages and exchanges as collaborating to rig the stock market. The firm was questioned by New York Attorney-General Eric Schneiderman as part of his investigation into electronic trading.

    "This is quite a different field of finance that Temasek would have traditionally been involved in," Jason Hughes, head of CMC Markets in Singapore, said. While high-frequency trading "has had negative headlines in recent months amid allegations that they are taking advantage of other investors, overall, a lot of these firms have added liquidity into the markets", he said.

    Silver Lake will continue to be a minority shareholder in New York-based Virtu, according to the statement.

    The share of Temasek's investments in North America and Europe has increased to 14 per cent of its portfolio as of March 31, up from 12 per cent in the previous year, according to its latest annual report published in July.

    Among Temasek's acquisitions of US-listed firms this year was a stake in Thermo Fisher Scientific, a manufacturer of scientific instruments and chemicals. It also bought a stake in financial-data provider Markit and information technology firm Cognizant Technology Solutions, one of the largest providers of outsourcing services.