Goldman Sachs, Citigroup and Barclays are among the Wall Street banks sharing in a $1.1 billion bounty after Tradeweb Markets, the fixed-income and derivatives platform, made a strong debut on Nasdaq. The investment banks were among eight celebrating a windfall after selling their stakes in the US company, which is majority-owned by the data provider Refinitiv, in one of the largest stock market listings in America this year.
Tradeweb twice raised the size of the offering from an original amount of 27.3 million shares, to 40 million. It priced them at $27, more than a previously indicated range of $24 to $26. In trading on Nasdaq, Tradeweb shares rose 33% to close at $35.81. The IPO will allow six of the investment bank backers, such as Morgan Stanley and Deutsche Bank, to reduce their holdings. UBS and Royal Bank of Scotland will dispose of their stakes entirely, as they pare back their fixed-income trading businesses.
“We’ve got to a stage and size of business . . . where the governance structure didn’t hold for the next leap forward. The breadth of the business requires a more streamlined governance structure. I think people have understood the value of a network business,” said Lee Olesky, Tradeweb’s chief executive, in the FT article.
Founded in 1996, Tradeweb has ridden a two-decade long trend on Wall Street for increasing electronification of swaps, bond and exchange-traded funds, as traditional, voice-brokered deals die away as they did in equities. The platform connects investment banks with customers such as asset managers, central banks and insurers. It handles about $550 billion in daily trading volumes of government and corporate debt, swaps and mortgages, in competition with rivals including Bloomberg and MarketAxess.