Gain Capital May Buy GFT Forex’s Japanese Retail Accounts
Gain Capital Holdings Inc. (GCAP), after announcing yesterday that it will acquire the U.S. individual accounts of GFT Forex, said it’s in talks to purchase the rival online-trading company’s retail business in Japan.
GFT Forex said Dec. 3 that it was closing its U.S. retail foreign-exchange business. The cost of the approximately 8,600 U.S.-listed foreign-exchange accounts from Grand Rapids, Michigan-based GFT is dependent on future cooperation, which may come in less than a month, Gain Capital Chief Executive Officer Glenn Stevens said in an interview yesterday.
Bedminster, New Jersey-based Gain Capital, which purchased Deutsche Bank AG’s retail currency trading business last year, will move customer accounts held at the GFT’s U.S. regulated subsidiary, Gain said in a statement yesterday. The transfer is an opt-out process and Stevens expects a more than 90 percent customer retention rate, he said.
“It’s future consideration because of other cooperation’s to work together in other areas as well, like other geographies and other products,” Stevens said by telephone.
The business that GFT would be in talks to sell would be its Japanese retail accounts, said Gary Tilkin, president and CEO of GFT Forex.
“It’s a possibility,” Tilkin said by telephone yesterday. “We don’t have any signed agreement, we don’t have any clearance by the regulators in Japan to do anything yet.”
The accounts, which are scheduled to be transferred today, will mean “a significant uptick for our U.S. customers in terms of number of customers and assets,” according to Stevens. The company has a total of $450 million in customer accounts of which $325 million is foreign-exchange, Stevens said.
Gain was one of multiple parties interested in acquisition, Stevens said. GFT plans to focus on institutional clients.
This is its second acquisition this year after purchasing Open E Cry from Charles Schwab’s Option’s Express in June. The company also bought the currency retail businesses of Capital Market Services LLC and MG Financial LLC in the second half of 2010 and a controlling stake in Japan’s Fortune Capital Co. in March 2009.
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