Tradeweb Markets completed the acquisition of the brokerage assets of Rafferty Capital Markets, LLC in mid March. Now that it has bought a New York-based registered broker-dealer, Tradeweb plans to launch an electronic inter-dealer marketplace for US Treasuries later this year. This latest acquisition underscores the firm’s strategy to expand the reach of its Dealerweb inter-dealer division, which evolved out of Tradeweb’s purchase of brokerage firm Hilliard Farber & Co, back in 2008. “The Rafferty brokerage team further extends and expands our business in the IDB Rates markets through the strength of their dealer relationships and our proven technology and industry experience,” explains Billy Hult, president, Tradeweb Markets.
Rafferty Capital Markets is the trading and brokerage arm of Rafferty Holdings, a privately-owned firm established in 1987. Following the acquisition, the brokerage desks for US Treasuries, US agencies, mortgages, repo, corporate bonds, taxable municipal bonds and the JJ Kenny Drake tax-exempt municipal bond brokerage group will join the Dealerweb division. It has been a successful accretive business approach; since launching its IDB business, trading volumes have more than doubled, with the fastest growth taking place on Tradeweb’s electronic trading platforms.
Rafferty Capital Markets will continue to operate as a registered broker-dealer. Rafferty Holdings will also continue to operate their other business, Direxion Funds/ETF’s and Hilton Capital Management.
The creation of an inter-dealer business in 2008 was a natural extension for Tradeweb, which claims that by leveraging its technology and market expertise and the strong voice franchise of the Rafferty brokerage team, Dealerweb will provide a fully integrated hybrid voice/electronic trading solution for off-the-run US Treasuries.
The new platform is expected to launch later in Q4 2011. “This is an important transaction for Tradeweb Markets, which enhances our position in the top tier of the IDB markets,” claims Lee Olesky, Tradeweb’s chief executive. “As market structure continues to evolve, our rapidly growing and diverse portfolio of businesses will enable us to lead the migration towards more transparent and efficient financial markets.”