Warburg Pincus invests $75m in trading tech company

The private equity firm announced that it will invest $75m in financial trading technology company NYFIX, with Warburg’s entrepreneur in residence becoming CEO.

Warburg Pincus is continuing its run of investing in financial technology companies with a $75 million (€58.5 million) investment in New York-based trading technology firm NYFIX.

According to a source close to the transaction, Warburg will own about a 30 percent stake in NYFIX, but not ownership control—although Warburg will have its managing director, Cary Davis, and vice chairman, William Janeway, on the company’s board of directors. Additionally, Howard Edelstein, a longtime financial technology executive and Warburg’s entrepreneur in residence, will become NYFIX’s CEO and a board member.

Under the agreement, Warburg will buy 1.5 million shares of the company’s convertible preferred stock. NYFIX plans to use the proceeds from the sale for business development activities and general corporate purposes.

NYFIX today reported total revenues of $24.8 million (€19.3 million) for the three months ending June 30, up $900,000 from the same period a year ago. Last month, it sold its NYFIX Overseas unit to French financial software maker GL Trade for $7.7 million (€6 million).

This is the latest in a series of Warburg Pincus investments in the financial tech sector. Last month it added New York and London-based transaction software maker Wall Street Systems to its portfolio, following its 1999 investment in financial supply-chain software company TradeCard and its 2002 investment in bank software firm Yodlee. Warburg has approximately $10 billion (€7.8 billion) under management.