Alternative share trading platform Turquoise is looking for fresh funding from new investors just two months after launch.
Turquoise, which claims to have captured a five per cent share in European stocks traded on its platform, was originally established by a consortium of seven investment banks, including Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Merrill Lynch, Morgan Stanley and UBS. BNP Paribas took a three per cent stake in the venture in July.
But with many of its original backers now strapped for cash, Turquoise is moving to expand its shareholder base and tap new investors for its next round of funding.
The company is understood to have approached four potential investors, as it bids to maintain its profile amidst a rash of new competitors challenging traditional exchange venues. The arrival of new participants would be a boost to Turquoise as it strives to inject fresh liquidity and attract more business from smart order routers trawling the markets for best execution opportunities.
The founding fathers of Turquoise have an agreement to make markets in the stocks it offers for a limited period. That agreement, which expires next year, has a clause that allows them to opt out because of volatility, leaving the firm vulnerable to a potential liquidity crunch.
According to a report in the Financial Times, Turquoise is also launching an "equity incentive programme" allowing existing members to earn equity in the platform based on levels of trading activity. Turquoise in talks to secure fresh funding - FT