High-speed trader Infinium Capital starts talks on tie-up
CHICAGO Aug 20 (Reuters) - Infinium Capital Management is in talks to acquire a strategic partner, the president of the high-speed U.S. trading firm said on Tuesday.
"We are looking at multiple strategic partners to strengthen our capital position," President Mark Palchak told Reuters. "Capital is the life blood of what we do."
Merger talks have increased in the high-frequency trading business as firms face increased competition and regulatory oversight, low interest rates that have hurt volume and volatility, and the uncertain global economic recovery.
A favored tool of hedge funds and other institutional traders, high-frequency trading uses so-called algorithmic software programs to post orders in the blink of an eye.
The practice accounted for more than 60 percent of all futures volume in 2012 on U.S. exchanges like the CME Group Inc and IntercontinentalExchange Inc, according to New York industry researcher The Tabb Group.
Privately held Infinium is a household name in Chicago's trading community. The firm trades in commodities, energy and other markets.
George Hanley, a co-founder of Infinium who went on to run a separate trading firm, earlier this year took the helm from founding principal and chairman Charles Whitman, people with knowledge of the situation told Reuters last month.
Rivals have been under pressure. Trading companies Getco Holding Co and Knight Capital Group, which merged in July to create KCG Holdings Inc, recorded second-quarter losses, mainly due to deal costs, though the low-volume, low-volatility trading environment also hurt.
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