MarketAxess Holdings Inc, the operator of an electronic trading platform for fixed-income securities, has entered into a definitive agreement to acquire Pragma, a quantitative trading technology provider specializing in algorithmic and analytical services in equities, FX and fixed-income.
Pragma’s independent, broker-neutral, multi-asset trading solutions have powered asset managers, hedge funds, broker-dealers, banks, and exchanges around the world. The company’s algorithmic trading platform and quantitative execution solutions provide equities and FX clients with automated, AI driven, multi-asset and multi-market execution solutions. Last year, Pragma handled over $2 trillion of algorithmic order flow in multiple asset classes on behalf of clients across over 50 venues.
Earlier this year, MarketAxess announced the first client algorithmic trade executed across multiple protocols in US credit using Adaptive Auto-X™, the Company’s multi-protocol automated execution solution currently in pilot. In 2020, Pragma introduced a deep neural network-based execution engine that controls the routing, sizing, pricing, and timing of orders, and has shown a robust improvement in execution quality. Pragma’s algorithmic platform and technology team will help MarketAxess accelerate development of execution algorithms and data-driven analytics across all fixed-income products.
Chris Concannon, Chief Executive Officer of MarketAxess, commented, “Our acquisition of Pragma underscores MarketAxess’ commitment to innovating, integrating, and providing our clients with quantitative, AI-powered technology solutions powered by proprietary data designed to simplify and enhance their workflows. In addition to accelerating our leadership in the fixed-income automation and algo space, Pragma’s years of expertise with FX algos provides a unique opportunity for FX hedging solutions for our Emerging Market clients.”
David Mechner, Pragma’s founder and Chief Executive Officer, said, “Pragma and MarketAxess share a common mission of using technology and automation to improve trader efficiency and generate superior trading outcomes for investors. MarketAxess’ scale and resources will amplify the results we can deliver for clients with the cutting edge technologies we’ve built – both for our existing clients in equities and FX, and for MarketAxess’ large client network as we continue developing new solutions in fixed-income.”
Nash Panchal, Chief Information Officer of MarketAxess, added, “This acquisition represents a major milestone in our tech story. The Pragma team brings invaluable technology assets and deep expertise in execution algorithms and automation – from high performance workflow solutions to artificial intelligence in trading equities and FX. We look forward to building upon those capabilities to enhance the services we provide our clients in fixed-income.”
The transaction is expected to close in the fourth quarter, subject to the satisfaction of customary closing conditions.
Broadhaven is serving as financial advisor and WilmerHale LLP is serving as legal adviser to Pragma. Weil, Gotshal & Manges LLP is serving as legal advisor to MarketAxess.
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