The Royal Bank of Canada is buying the brokerage business of Carlin Financial Group in a bid to boost its electronic trading capabilities for hedge fund and professional traders.
RBC, the largest bank in the country, did not say how much it is paying for the assets of the New York-based boutique broker dealer, but the acquisition is expected to close in the first quarter of 2007.
The purchase will give RBC an "electronic execution platform from which to serve the emerging hedge fund and professional trader communities," the Toronto-based bank said.
Carlin Financial Group's electronic system trades around 35 million shares daily.
RBC said the system, described as one of the fastest and most efficient in the industry, has developed a large following with professional hedge fund managers.
"We believe that this acquisition allows us to create a leading North American electronic execution platform for investors and expand into multi-asset class electronic trading," said Greg Mills, RBC Capital Markets' head of global equity sales and trading.
Internationally, hedge funds have swelled to a $1.1-trillion (U.S.)-a-year industry, with many predicting more growth ahead as pension funds and wealthy individuals diversify their holdings and try to boost returns.
Carlin CEO Jeremy Frommer, a former RBC employee, said the acquisition will expand RBC's trading capabilities into options trading, futures trading and order management.