Following its $15m investment in financial analytics startup Kensho late last year, investment bank Goldman Sachs has invested $20m in high-frequency trading firm Perseus.
Perseus provides managed services for high-speed connectivity and has been developing low-latency trading technology and market connectivity since it was set up in 2009.
“We see a great opportunity in the financial sector in general, and Perseus in particular,” said Goldman Sachs director Terry Doherty. “Not only is its business performance exceptional, but it has the potential to dramatically shift the way that global markets engage by introducing faster and more secure managed services to the industry.”
Jock Percy, CEO of Perseus, said the investment by Goldman Sachs will accelerate the business. “It enables us to maintain our leadership position in product and service innovation, while more rapidly expanding our global network,” he said. “This ensures that we continue to meet and exceed our customers’ performance objectives around the world.”
Perseus currently supplies managed services and connectivity to more than 300 exchanges and markets in 18 countries.
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- More than half of financial trading companies think they should be able to access markets more quickly.
- HSBC has named the replacement for the departing CIO of its investment banking division.
- Investment bank Merrill Lynch International has been fined £13.2m by the FCA for failures related to reporting transactions.
Investment banks have traditionally done their IT development in-house, but the sector is increasingly looking to work with third-party suppliers and this often includes investing in them.
Sumeet Chabria, then CIO global banking and markets at HSBC, told Computer Weekly last year: “The industry needs to look beyond in-house teams and established technology suppliers for innovation and has identified the startup sector as a source. We need to access talent wherever it is present and use it for innovation.”
Good connectivity to financial markets is in demand as many trading firms attempt to enter new markets. Many are currently failing to do this because of the technology they use.
More than half of financial trading companies think they should be able to access markets more quickly, with the average trading desk estimated to be losing $5m a year because of poor connectivity, according to research sponsored by Colt.
In the survey of 289 senior trading managers, 40% said current connectivity is hindering their entry into new markets and 32% said they have technology failures at least once a week.
Almost half (49%) of traders in Europe, the US and Asia believe that delays in connecting to new markets result in missed trading opportunities, and 47% think it leads to the loss of clients.