ICE buys NYSE
Love is all around us this December. Getco buys Knight. NASDAQ buys TOM. Afraid to be alone with Christmas, ICE responds with buying NYSE Euronext. Well, they aren’t really after Euronext nor NYSE : the derivative trading business Liffe is the crown jewel.
Time flies. Back in 2000 Euronext was formed with the merger of the exchanges of Amsterdam and Paris and a tiny bit of Brussels. In 2001 the combination bought London International Financial Futures and Options Exchange (LIFFE). NYSE bought all this in 2005.
It puzzles me how energy exchange ICE managed to become the bigger fish in the pond of exchanges. The new ICE-NYSE combination will get rid of Euronext stock market with a public offering. Derivative trading unit Liffe – with all the short term interest rate futures – is what ICE is looking for.
Practical consequences of the deal in Europe will probably be zero in the short run. This will change when the markets will be reshuffled, again. In the meantime, ICE-NYSE is overtaking Deutsche Boerse as number three in exchanges by market value. CME is number two and Hong Kong Exchanges is the biggest. Didn’t know that.
first,
‘It puzzles me how energy exchange ICE managed to become the bigger fish in the pond of exchanges’
did you miss the bubble moving away from stock and equity to energy and commodity?
And IMC is trying to get into aaset management by buying a hedge fund!
shame on IMC Zug! They know why, and a lesson for all “seniors” to never share or teach anything to the juniors.
Dit artikel gaat niet over IMC maar over ICE en NYSE. Misschien moeten jullie maar eens een blog starten die alleen maar over IMC gaat. Kunnen jullie daar lekker doorgaan met zeuren. Doe dan maar direct hetzelfde voor Optiver, AO, Tibra en alle andere bedrijven waar jullie alleen maar over door blijven emmeren.
Wat de koop van NYSE door ICE betreft: ik vind het geniaal. Eindelijk is er concurrentie op komst voor CME. Benieuwd naar de reactie van TOM…
Er komen spannende tijden voor iedereen bij Euronext. Sterkte!
@10:19 They know why …
yeah but we don’t, so please elaborate!
or do you still care for IMC’s omerta to silence you?!
@9:09 I call BS
‘And IMC is trying to get into aaset management by buying a hedge fund!’
hasn’t IMC been running an asset management arm for a while now?
Which hedge fund have they brought in? are you sure its for asset mgmt and not for the trading division?
‘shame on IMC Zug! They know why’
why, what happened? They got rid of senior people and kept the cheap juniors
‘a lesson for all “seniors” to never share or teach anything to the juniors.’
buddy, let me tell you something how it works in real life, this trick of not teaching has existed since the dawn of relative performance, try all you want, tomorrow, a bright young guy willing to take peanuts and looking to do more work than you would come along, fact of life, nothing you can do to stop it, try all you want.
This article is not about IMC but ICE and NYSE. Maybe you should start a blog but that just goes on IMC. Can you lie back continue whining. Then do the same but directly for Optiver, AO, Tibra and all other companies where you only continue ruminating about.What the sale of NYSE ICE concerned, I think it’s genius. Finally there is competition coming for CME. Curious about the reaction of TOM …There are exciting times for everyone at Euronext. Strength!
‘IMC’s omerta’
isn’t that an oxymoron?
‘@9:09 I call BS’
are you rob or pot?
wait and see
I don’t see any reason why IMC would buy a hedge fund. Any successful small shop like HiQ Invest does not have any incentive to sell themselves, a shit shop like Transtrend isn’t worth buying as they have outdated technology.
@ 12:26 pm: you win the prize for best sarcasm. Transtrend sold themselves at their peak for well over a hundred million to Robeco.
HiQ Invest on the other hand is a very small shop with less than 1% of the AUM that Transtrend has and an unimpressive track record. They still gamble away a lot every now and then with their pairs trading and the company has cumulative profits of less than 250k after almost 6 years (!!!!!) in business. Company loses money again this year. They cater to retail investors from 2000 euros onwards. How can you mention them in the same breath with Transtrend??
HiQ is fully automated trader, their mkt neutral seems like consistent returns, what’s the fund size, if the owner wants to cash in or sees a difficult outlook or needs to raise capital, then maybe wants to sell a stake to IMC?
http://www.hiqinvest.com/en/
IMC has excess capital or looking for inorganic growth, consolidation, cost scaling, so could buy something like this?
is this correct that Transtrend is 8.7bn $ hedge fund? with that much cash, it’s hard to imagine outdated technology? their performance has been quite close to zero for last few years, are investors still sticky?
http://www.transtrend.com/uk/monthlyhtml
In the hedge fund world success isn’t measured by profit for the investors, but by the fees you rake in. That HiQ Invest didn’t make money for the investors doesn’t say anything about how the general partner did for himself.
Had a look at the HiQ Invest website. The monthly returns from their market neutral fund seem to have an unusually high correlation with the general market for a market neutral fund. If that’s beta=0, then I’m Santa Claus.
‘the company has cumulative profits of less than 250k after almost 6 years’
are you sure, it doesn’t sound consistent with their NAV?
‘They cater to retail investors from 2000 euros onwards’
it says on their website – ‘minimum investment of €2.500,-‘
‘How can you mention them in the same breath with Transtrend??’
well both are hedge funds, HiQ being tiny doesn’t preclude them from the HF universe?
‘In the hedge fund world success isn’t measured by profit for the investors, but by the fees you rake in’
you can rake in more fees and for longer time if you generate profit for the investors?
‘That HiQ Invest didn’t make money for the investors doesn’t say anything about how the general partner did for himself.’
are they up few million?
‘The monthly returns from their market neutral fund seem to have an unusually high correlation with the general market for a market neutral fund’
yes the monthly returns seem to be consistent with general risk-on risk-off period, nice spot, what’s the correlation for the given data, i don’t have monthly AEX closes with me now?
“success isn’t measured by profit for the investors, but by the fees you rake in. That HiQ Invest didn’t make money for the investors doesn’t say anything about how the general partner did for himself.”
Who’s talking about money they made (or rather, didn’t) for investors or their nav, which is more or less the same thing.
I will state it more clearly: the partners earned 250k over the last 6 years. That’s the profit that the HiQ fund management made for its shareholders=partners (at the expense of the fund investors).
I.e. the fees they raked in minus their expenses (modest salaries-no big bonuses, office rent etcetera) minus taxes, the whole nine yards. That comes down to around 250k over the last 6 years. For a fund of such small size, the fees barely cover their general expenses (such as the 20 employees). They have to dramatically improve their performance, increase their aum and/or trim their costs. It’s that simple.
But I do stand corrected: minimum investment 2.500 euros not 2.000. My bad. Never heard of a succesfull hedge fund with such a low threshold. Desperately in need of raising aum methinks.
‘the partners earned 250k over the last 6 years. That’s the profit that the HiQ fund management made for its shareholders=partners (at the expense of the fund investors).’
how are you so sure? also the profit is generated as fixed % and variable of the performance, so its the fees that the fund investors have accepted for their NAV growth?
‘They have to dramatically improve their performance, increase their aum and/or trim their costs. It’s that simple.’
who cares, they are a fully automated trader.
‘Never heard of a succesfull hedge fund with such a low threshold’
well then, dutchchies are small timers anyways, so you have to adjust your thresholds
‘Desperately in need of raising aum methinks.’
If only.
“how are you so sure?”
read the company’s accounts … available for you to download from their website.
“also the profit is generated as fixed % and variable of the performance, so its the fees that the fund investors have accepted for their NAV growth?”
it’s really quite simple. they take 2% fixed plus a 20-30% performance fee. with 40m aum the 2% fixed just about covers their salaries (headcount of 20). so if they don’t perform, like this year, there’s no performance fee and the management company lose money because their expenses go beyond the salaries. read the accounts.
“dutchchies are small timers anyways”
you mean like optiver and transtrend (the latter with close to 10 billion aum)? right on buddy.
‘what’s the correlation for the given data, i don’t have monthly AEX closes with me now?’
instead of AEX close, proxy SX5E monthly close can be used, here are the annual correlations
2007 82%
2008 81%
2009 93%
2010 2%
2011 79%
2012 37%
of course, if we take all the years together, it comes out -43%, i guess over longer term the correlation breaks apart or there is more data points in itself causing this, curiously their January’s have been excessively strong bucking the market performance, are they mismarking the year ends ?
they are getting rid of a lot of people to make way for a takeover
slowly moving out of prop trading and trying to break into asset management
transtrend is all rabo retail money
not a real fund
if you manage a hedge fund with $5bn, you take $100mm mgt fee before making a dime in performance.
thats a better business model than any of the silly dutch companies
booom
“transtrend is all rabo retail money”
nonsense. minium investment with transtrend is $ 5 million. that’s not retail.
vast majority is through rabo distribution network and subsidiaries
fact
let’s stay on topic… the topic was IMC… oh wait
@8:15 if you manage 5bn, then most probably you have some large customers (say sovereign wealth funds/pension funds) who don’t want to pay you 2% fixed a year. More close to 0.5%.
The 2/20 deal that most hedge funds offer to small clients are of course negotiable.
‘they are getting rid of a lot of people to make way for a takeover’
are you talking about IMC?
‘slowly moving out of prop trading and trying to break into asset management’
prop trading is a difficult business to run, it certainly can’t be done if you keep firing talent or having clueless management at the top of teams, moving to buy side or sell side is of course what IMC and Getco are trying to do
‘transtrend is all rabo retail money’
so what, it’s real money with real fees?
‘not a real fund’
yes, it’s an unreal fund
‘if you manage a hedge fund with $5bn, you take $100mm mgt fee before making a dime in performance.’
hedge funds have three broad categories beneath – beta, smart beta/alpha, alpha – you can’t charge 2/20 on all those three categories, and to think if transtrend is performing enough to charge 2, then it deserves it
‘thats a better business model than any of the silly dutch companies’
just because one business model is superior doesn’t mean it can be successfully executed by all or is suitable for all, it’s much harder and not suitable for dutchchies, they can continue their old timer diming
‘booom’
you are such a studd
‘minium investment with transtrend is $ 5 million. that’s not retail.’
it’s retail if retail’s pension gets pooled and invested in it or they buy a note, genius.
‘let’s stay on topic… the topic was IMC… oh wait’
wat about IMC? are they looking to buy HiQ or something similar? why do they want to grow inorganic and what about the current organic growth prospects?
‘it’s retail if retail’s pension gets pooled and invested in it or they buy a note, genius.’
no, they call that institutional
how is that institutional, if i tell my bloody pension broker to buy that fund or ask my bloody stock broker to buy the note?
We’re talking about Dutch funds here. In the Netherlands 99% of pensions (give or take 1%) are defined benefit, i.e. the fund manager makes all decisions and the pensioners don’t even know how the money is invested.
really dutch are still in the era of of defined benefits, boy dutchchies are really old skool, what discounting rate is going around in dutch pension markets these days, and how the hell dutch pension manager think that transtrend is going to deliver that
Got old school agency theory? It’s a hot-tub-full-of-hookers kind of discounting rate.
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