Newedge, the joint venture created from the merger of the brokerage businesses of Société Générale and Crédit Agricole’s Calyon investment banking divisi
Newedge, the joint venture created from the merger of the brokerage businesses of Société Générale and Crédit Agricole’s Calyon investment banking division, is aiming to become a leading player in the prime brokerage market, according to chairman Marc Litzler.
Newedge, which brings together the Fimat and Calyon Financial brokerage businesses, will be initially headed for the first two years by Calyon chief executive Litzler as chairman and Philippe Collas, deputy chief executive of Société Générale, as vice-chairman.
Société Générale and Calyon will fill these roles alternately, rotating every two years. Patrice Blanc, former chairman and chief executive of Fimat, is chief executive of Newedge, while Richard Ferina, former chairman and chief executive of Calyon Financial, is his deputy.
Société Générale and Crédit Agricole say Newedge benefits from the backing of their strong credit ratings, while operating independently of its shareholders. The new company’s status as a bank, they add, offers robust financial strength to its customers in financing and margining operations.
With a leading market position in its core business as a futures commission merchant, Newedge ranks among the top five global players in clearing and execution on all of the top 10 exchanges, with more than 5 million contracts executed on average per day. On a pro-forma basis, the combined business would have generated more than EUR1bn in revenues last year.
With a leading global position in the execution and clearing of listed derivative products, Newedge offers a full range of clearing and execution services covering options and futures contracts for financial products and commodities, as well as for money market instruments, bonds, foreign, equities and commodities on OTC markets.
Its value-added services include prime brokerage, asset financing, an electronic platform for trading and order routing, cross margining and the centralised reporting of client portfolios. The new firm plans to extend its prime brokerage offering in multiple asset classes including equities, bonds, currencies and commodities and will actively pursue business opportunities from its e-brokerage platform.
The combined firm has around 3,000 staff, a presence in 17 countries, direct access to more than 70 derivatives and stock exchanges worldwide, and a client base comprising financial institutions, hedge funds, asset managers, professional trading groups and corporates.
‘Globalisation is transforming the business landscape and consolidation is accelerating,’ Litzler says. ‘By combining Fimat and Calyon Financial, we have created an independent brokerage player. We are confident that Newedge will double its results over the next three years.
‘In addition to the merger’s benefits and its already strong position in its core business, Newedge’s ambition is to become a key player in the prime brokerage business. While continuing to support the company’s development, the shareholders hope to engage in an IPO within 18 to 24 months.’
Adds Blanc: ‘The creation of Newedge could not have come at a better time. We operate in a fast-moving industry where current economic uncertainties create plenty of opportunities for us. In a context of globalisation and exploding volumes, scale is critical to maintain a leadership position.
‘Through our increased size, we can create the larger liquidity pools that our customers require. Newedge is today on an aggressive growth track. We are an innovative new player, poised for growth and conquest, driven by a culture of partnership with our customers.’
Newedge has announced the appointment of Jean-Christophe Huertas as brand and communications director, responsible for defining and implementing the company’s communication and brand strategy. He will report to Blanc and will be assisted by a worldwide team based in Chicago and New York, London and in the Asia-Pacific region.
