Advent International has agreed to acquire a majority interest in BondDesk Group, an alternative trading system focused on odd-lot bond execution. Financial details of the acquisition were not disclosed.
Founded in 1999, the company operates a retail fixed-income trading platform through its proprietary BondDesk ATS. Through the system, clients can access over 30,000 live taxable and tax-exempt security offerings and execute over 20,000 transactions per day, BondDesk said.
BondDesk CEO Robert Slaymaker says that in an area where there isn’t tremendous transparency or liquidity, the system provides an invaluable service.
“It was originally intended to increase the transparency available to retail reps as they traded fixed income for their clients,” he said. “Clients are seeing competing prices or at least they’re able to search through a very deep and broad inventory to assist in the process of finding the right price for their client.”
Chris Egan, a principal with Advent, says the firm was attracted to the company because of trends in the sector.
“Longer term we do think there is overall growth in retail bond trading, in part driven by demographics and changes in asset allocation as people reach retirement age,” he said.
Advent has a history of financial technology and services investments in companies such as Datek Online/Ameritrade, The Island ICN/Instinet and more recently inter-dealer broker GFI Group, which completed an IPO in January 2005 valuing the company at $560 million. Since then Advent has disposed of 90 percent of its original position in GFI. The firm has offices worldwide and has raised over $10 billion in cumulative capital. Advent raised three new buyout funds in 2005 totalling over $4 billion. The BondDesk investment is coming out of the fund Global Private Equity V.