Citadel Securities takes minority stake in Wolfe Research to add equity research
What's the deal? Citadel Securities is acquiring a minority stake in Wolfe ResearchDealroom has a profile for this one. Try Dealroom →, gaining an equity research capability and additional trading business, according to BloombergDealroom has a profile for this one. Try Dealroom →. Terms were not disclosed. It is Wolfe Research's first outside investor.
How it works: Citadel Securities will handle trade execution for Wolfe's clients and sell Wolfe's research products to its own customer base. The firm plans to shift the execution of equity and options trades to Citadel Securities over time, while keeping its research relationship with NomuraDealroom has a profile for this one. Try Dealroom → in Japan.
Why now? "We were missing a certain part of the equity flows because a certain aspect of these flows are directly tied to the research product," Citadel Securities president Jim Esposito told Bloomberg. The deal lets the firm add research without building an operation from scratch.
What's the endgame? It pushes Citadel Securities deeper into a space long dominated by Wall Street banks, which bundle research with trading, investment banking, and wealth management to attract clients. Founder Ed Wolfe said his firm has no interest in merging with a bank. "What we're interested in is providing our clients with the best tools to not only use our research and analysts, but then be able to express their views through seamless execution capabilities," he said.
The players: Ed Wolfe launched the firm in 2008 after years as an analyst at Bear StearnsDealroom has a profile for this one. Try Dealroom →. Its offerings span quantitative analysis, equity and macro research across hundreds of companies, and coverage of economics and policy; it also runs a broker-dealer used as an IPO underwriter. In 2020, Wolfe Research folded into Nomura GroupDealroom has a profile for this one. Try Dealroom →'s trading and investment-banking operations.
The hire: Citadel Securities, founded by Ken Griffin, recently hired Scott Rubner, a former managing director at Goldman Sachs GroupDealroom has a profile for this one. Try Dealroom →, for its institutional derivatives business. Rubner's market commentary will stay separate from Wolfe's research and remain free for Citadel Securities clients.
The signal: Citadel Securities handles more than a third of all US retail stock trades and has been expanding its institutional business across fixed income and larger stock orders. Tying research to execution is its latest move onto territory traditionally held by the big banks.
Read more: finance.yahoo.com
Image credit: Ken Lund
