The New York based-broker dealer Concept Capital Markets today announced the acquisition of Alaris Trading Partners amid an environment of potential growth.
In a joint press release issued today, the two firms announced that they have entered into a definitive agreement for the acquisition of Alaris by Concept.
Terms of the transaction were not disclosed and it still needs the approval by the Financial Industry Regulatory Authority (FINRA).
The merger will offer institutional brokerage services to hedge funds, asset managers and registered investment advisers (RIAs) worldwide.
Jack Seibald, co-founder and senior managing director of Concept Capital told eFinancialCareers that with the merger, 15 Alaris employees will be joining Concept's broker dealer business, which currently has a staff of 80. There are another 35 middle and back office employees at Concept working in related businesses, not all of which are broker dealers.
This represents approximately a 10% growth in staff for Concept, and Seibald believes it's just the beginning.
"I think there will be a period of integration between the two firms and by the end of September, we'll see a lot of movement in the industry to extent there are others who are looking to be folded in somwhere," said Seibald.
This growth mode, says Seibald, is being driven by two trends, one driven by new regulations coming out of Dodd-Frank and the other by investor requirements for access to quality information on investment managers.
"Our business deals primarily with hedge funds and traditional RIAs," notes Seibald citing the growth in RIAs and in assets allocated to hedge funds.
The deal continues the ongoing consolidation in the prime brokerage arena that has taken place over the last few years, as many firms have looked to join forces to stay afloat. Last November it was reported that I.A. Englander, one of the largest independent U.S. derivatives brokerage firms, was going to acquire Alaris Trading, but in May the two parties mutually decided to rescind the deal.
Through its strategic alliances with major securities industry firms, Concept offers clients a selection of services that includes multi-prime brokerage, financing, institutional reporting, outsourced middle and back office services, risk management and direct access and voice brokerage.