ConvergEx, a leading provider of investment and execution technology solutions to institutional clients worldwide, today announced that it has signed a definitive agreement to acquire NorthPoint Trading Partners, LLC.
With this acquisition, ConvergEx will offer small and medium sized hedge funds access to a full range of top-tier introducing, also known as boutique, prime brokerage services through NorthPoint's high-touch service model and established clearing and custody agreements. The deal is expected to close in the near term. Financial terms of the agreement were not disclosed.
"ConvergEx has well-established execution and technology relationships with many of the world's large hedge funds and we understand the nuances of what hedge fund managers need to succeed. This acquisition is a natural extension to those relationships and enables us to offer smaller hedge funds wide-ranging services and expertise embedded in the high-touch service model that is so important to them," said Joseph M. Velli, chairman and chief executive officer of ConvergEx Group. "Additionally, as we integrate this new business line, NorthPoint's clients will reap many benefits from leveraging ConvergEx's state-of-the-art technologies and products."
According to a recent TABB Group report, it is estimated that the number of funds in the small to mid-sized hedge fund segment exceeds the count in the larger hedge fund segment by 25 to 1 and that introducing or boutique prime brokerage firms garner approximately 10% of all new prime brokerage arrangements. NorthPoint is a premier provider of boutique prime services and is known for its top-of-the-line solutions, years of experience and seasoned industry veterans.
Douglas M. Nelson, chief executive officer of NorthPoint, and Michael L. DeJarnette, NorthPoint's president, will continue in their respective roles at ConvergEx.
"NorthPoint offers services that are very much in high demand. In order to be competitive and thrive, start-up and mid-sized hedge funds need access to powerful and customized boutique prime brokerage services, and in the past they have had difficulty accessing these services through traditional prime brokerage arrangements," said Mr. Nelson. "We are all thrilled to have joined the ConvergEx family. Together we believe we can offer the next generation of boutique prime brokerage services."
NorthPoint will continue to be based out of Atlanta, Georgia, and all of its clearing and custody arrangements, products, partnerships and projects will continue uninterrupted. Almost immediately, NorthPoint clients can expect to see a broad range of additional products and services from ConvergEx that they can choose to employ, including a 24-hour global agency trading platform, an industry-leading commission management system and enhanced soft dollar services.