Financial institutions M&A: Sector trends - January 2021
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Brokers/Corporate Finance

Financial institutions M&A sector trends: brokers/corporate finance — H2 2020 and outlook for 2021

"Traditional" brokers resort to M&A to survive in the COVID-19 climate, which has boosted customer demand for DIY online trading platforms




  • Moderate M&A activity levels


  • The COVID-19 pandemic driving customer demand for DIY/ online trading platforms (i.e., DriveWealth, M1 Finance, Groww, Morpher and Robinhood have all successfully raised growth capital in H2 2020)
  • Financial sponsors supporting digital disruptors
  • Brokers look to M&A to compete in the COVID-19 climate:
    • Gaining scale (e.g., Consultinvest/Sol&Fin merger, Citadel Securities' acquisition of IMC's designated market-making business, Interactive Investor's acquisition of Share, etc.)
    • Expanding geographical reach (e.g., OANDA's acquisition of TMS Brokers and EMZ Partners' acquisition of majority stake in ASSEPRO)
    • Amalgamating senior talent (e.g., Eaton Square acquisition of M&A Advisory)
    • Delivering electronification and efficiency (e.g., TP ICAP's acquisition of Liquidnet)
    • Encancing digital asset capability (e.g., INX's acquisition of Openfinance


  • Brokers under significant pressure to future-proof business models:
    • Scale to accommodate margin compression, whilst ensuring strategic fit and senior management shared values
    • Capital required for investment in automation as well as monitoring and reporting technology
    • Orientation of service delivery to enhance customer experience and achieve differentiation from competitors
  • Banks and other FIs seek:
    • Vertical integration (e.g., Deutsche Börse's acquisition of majority stake in Quantitative Brokers and MarketAxes's acquisition of Regulatory Reporting Hub)
    • Diversification into non-bank financial services (e.g., NI Capital's acquisition of Arabeya Online Brokerage and Banco BTG Pactual's acquisition of Necton Investimentos)
    • Opportunities to expand into China (e.g., Goldman Sach's acquisition of remaining stake in Goldman Sachs Gao Hua and J.P. Morgan's acquisition of remaining stake in J.P. Morgan Securities (China))


  • Uptick in "acqui-hires"—transactions aimed at inorganic growth of sector expertise
  • China—the new frontier
  • Rise of the JV model (e.g., ABN AMRO's Benelux equity brokerage JV with ODDO BHF)
  • Digital asset specialists seeking 'traditional' broking capability (e.g., eToro's rumoured interest in acquiring an operating broker/dealer)



Larger, more diverse and digitally enabled brokers to emerge in the next 18 to 24 months, offering brokerage services across a range of traditional and digital asset classes.


Other financial services—Publicly reported deals & situations

High investor appetite

Trade bulk-up:

  • Goldman Sachs (China): Acquisition of remaining stake in Goldman Sachs Gao Hua (December 2020)
  • J.P. Morgan (China): Acquisition of remaining stake in J.P. Morgan Securities (China) (November 2020)
  • NI Capital Holding (Egypt): Acquisition of Arabeya Online Brokerage (November 2020)
  • Eaton Square (UK): Acquisition of M&A Advisory (November 2020)
  • BTG Pactual (Brazil): Acquisition of Necton (October 2020)
  • Consultinvest & Sol&Fin (Italy): Merger (October 2020)
  • Citadel Securities (US): Acquisition of IMC's designated market-making business (October 2020)
  • TP ICAP (US): Acquisition of Liquidnet (October 2020)
  • Compagnie Financiere Tradition (New Zealand): Acquisition of OM Wholesale (September 2020)
  • OANDA (Poland): Acquisition of TMS Brokers (September 2020)

Trade diversification:

  • INX Limited (US): Acquisition of Openfinance Securities (October 2020)
  • MarketAxess (Germany): Acquisition of Regulatory Reporting Hub (September 2020)
  • Deutsche Börse (US): Acquisition of majority stake of Quantitative Brokers (September 2020)
  • Banque Misr (Egypt): Acquisition of further 9% of CI Capital (August 2020)

Private equity/Venture capital:

  • EMZ Partners (Switzerland): Acquisition of majority stake in ASSEPRO (November 2020)
  • Ribbit Capital (Online investing): Participation in US$21.4 million Series B funding round for Groww (September 2020)
  • Apex Ventures (Online trading): Participation in US$1.25 million Seed funding round for Morpher (August 2020)
  • D1 Capital Partners (Online trading): Participation in US$200 million Equity funding round for Robinhood (August 2020)

Market appetite:

  • Flexdeal: Successful €10 million capital increase via public subscription (August 2020)


Market consolidation to achieve economies of scale & scope

  • R.J. O'Brien & Associate (UAE): Acquisition of Lombard Forte Securities (August 2020)
  • K3 Capital Group (UK): Acquisition of Quantuma Advisory Limited (August 2020)
  • Freedom Holding Corp (Russia): Acquisition of Zerich Capital Management (July 2020)
  • Interactive Investor (UK): Acquisition of Share (July 2020)
  • Legae Peresec (South Africa): Acquisition of 49.9% of African Phoenix Investment (June 2020)


Mounting competition from digital providers

  • DriveWealth (Online trading): Successful US$56.7 million Series C funding round, led by Point72 Ventures (October 2020)
  • M1 Finance (Online trading): Successful US$45 million Series C funding round, led by Left Lane Capital (October 2020)
  • Groww (Online investing): Successful US$21.4 million Series B funding round, led by Ribbit Capital (September 2020)
  • Morpher (Online trading): Successful US$1.25 million Seed funding round, led by Apex Ventures (August 2020)
  • Robinhood (Online trading): Successful US$200 million Equity funding round, led by D1 Capital Partners (August 2020)


Click here to download 'Financial services M&A stages a herculean comeback in H2 2020, finishing the year on a high' PDF.


Financial institutions M&A: Sector trends

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