3i leads big US forex investment

The UK-based private equity firm and US venture firm VantagePoint have purchased a $117m minority stake in New Jersey-based GAIN Capital Group.

UK-based private equity and venture capital firm 3i has led a $117 million (€76 million) round of investment in online foreign exchange company GAIN Capital Group. 3i invested $97 million and existing investor VantagePoint Venture Partners invested an additional $20 million.

3i and VantagePoint purchased a minority stake from existing shareholders. A portion of the investment will go to GAIN’s balance sheet and be used to facilitate larger trading relationships with leveraged funds and institutions worldwide and support the growth of GAIN’s white label program which helps companies establish an online presence in the forex industry.

VantagePoint, based in Silicon Valley, was the sole investor in GAIN’s previous investment round in April 2006. GAIN’s complete investment group includes private equity firms Tudor Ventures, Edison Venture Fund, Cross Atlantic Capital Partners and Blue Rock Capital.

“GAIN has a strong reputation and an impressive track record from a financial perspective, achieving no less that 65 percent annual growth for the past six consecutive years,” said 3i US Growth Capital partner Whitney Bower.

Bedminster, New Jersey-based GAIN operates two web portals: Gain Capital for professional forex traders and FOREX.com for individual investors. The two portals support average trade volume in excess of $100 billion per month.

Forex is the most traded market in the world with daily volume exceeding $3.2 trillion, according to the Bank for International Settlements. In September, a consortium of investors led by US venture firm New Enterprise Associates and including Legg Mason, Cascade Investment and T. Rowe Price invested $100 million in forex trading platform OANDA Corporation

3i has over $13 billion in capital under management for investment in the US, Europe and Asia. 3i Growth Capital is the world’s largest growth capital fund and invests over $1.4 billion per year, according to the company.

The firm has also exited its 2004 investment in Bluetooth firm Ezurio. 3i sold its 55 percent stake to electronic components company Laird Technologies for $25 million.