Equiduct Systems Ltd., the European trading system owned by Citadel LLC and Knight Capital Group Inc., is seeking new investors as it tries to grow, according to two people with direct knowledge of the matter.
The London-based alternative platform, aimed at retail brokers, has been talking to securities firms and exchanges about selling a stake or adding partners, according to the people, who requested anonymity because the discussions are private. Equiduct plans a board meeting next week to discuss a rights issue and strategy, the people said.
Citadel Execution Services Europe, the market-making and electronic-trading unit of the Chicago-based hedge fund, bought a majority stake in 2009 in Equiduct, a multilateral trading facility operated by the Berlin bourse. At that time, Equiduct had yet to take business from exchanges such as Deutsche Boerse AG, London Stock Exchange Group Plc and NYSE Euronext.
Citadel appointed Peter Randall, who previously led Chi-X Europe Ltd., as chief executive officer of Equiduct in December 2009 to spur growth. In 2010 Knight, the largest trader of U.S. stocks, took a stake. Randall declined to comment today.
Equiduct’s monthly volume of shares changing hands exceeded 1 billion euros ($1.3 billion) in November 2010 for the first time. The company was deemed compliant with trading rules by the European Securities and Markets Authority, a move that may encourage traders to connect to the system, in March.
Multilateral trading facilities such as Chi-X Europe and Bats Europe emerged after new rules in 2007 facilitated competition with traditional exchanges.
Plataforma Alternativa de Valores Espanoles, or PAVE, which sought to create an alternative trading system in Iberian markets, halted operations this year due to the difficult financial environment in Europe and Nasdaq OMX Group Inc.’s Neuro unit closed after failing to gain market share. Bats Europe eventually bought Chi-X Europe.