Cantor Fitzgerald is preparing to give its institutional clients, including hedge funds and family offices, access to Kalshi’s prediction markets as demand grows for event-based instruments that can be used for both trading and hedging, according to a report by the Wall Street Journal.
The investment bank will act as a broker for clients seeking to trade large blocks of Kalshi’s yes-or-no contracts, which cover events ranging from weather and commodity prices to corporate results and other economic outcomes.
Cantor has around 3,000 institutional clients, and Pascal Bandelier, its co-chief executive and global head of equities, said investors have shown significant interest in gaining access to prediction markets.
The bank will arrange purchases and sales of sizeable positions and can help distribute those positions to other investors through privately negotiated transactions.
Hedge funds are particularly interested in contracts that allow them to take a view on specific business outcomes rather than attempting to express the same view through conventional securities. Bandelier said some funds, for example, have explored contracts linked to iPhone sales instead of trading Apple shares based on expectations for the company’s results.
Family offices are also examining prediction markets as potential tools for managing exposures to weather and commodity-related risks, including crop production and oil prices.
Susquehanna International Group, which is Kalshi’s main market-making partner, will provide pricing and liquidity for the event contracts through its Susquehanna Predictions business.
Joe Grubb, head of business development at Susquehanna Predictions, said institutions are also considering contracts linked to risks around AI supply chains and the cost of computing capacity.
Investors will have the ability to suggest new markets tailored to particular risks or investment requirements, with Kalshi and Susquehanna already discussing potential contracts with institutional participants.
The expansion reflects the growing effort by prediction-market operators to attract professional investors. Kalshi has recently focused on building institutional infrastructure, including completing its first block trade earlier this year involving a California carbon-allowance contract created specifically for the transaction.
The company has also partnered with Interactive Brokers as it seeks to broaden access to its event-based markets.
