Refco buys stake in ACM

Nick Bang, commercial director and part-owner of ACM in Geneva, said the backing of Refco would help support AC Markets’ aim to increase its penetration into high-net-worth and institutional business. "We are recognised as being very competitive but we are not the largest online broker," he said. "ACM has already been growing at an average of 15% every month for two and a half years, but with Refco’s backing we hope for further growth." This would take ACM closer to the volumes of its key competitive targets Saxo Bank, which is based in Copenhagen and New York-based firm Forex Capital Markets (FXCM). ACM currently transacts $20–$25 billion a month.

Farooq Muzammal, head of FX at Refco in London, said the firm had invested in ACM because of the strength of its technology and its management vision. "ACM has managed to cut itself an excellent niche in a competitive market, and we expect that with our support and experience we could help them expand at an exponential rate," he said.

Under the terms of the purchase, ACM’s four directors/co-owners will remain with the firm for at least three years. All four have reduced their stake in the firm, but retain a substantial minority shareholding.

Bang said that he does not expect major changes to the business as a result of the purchase. "The management will remain and we will continue to expand our team as necessary," he said. "Refco has a majority stake but does not wish to change things. They expect to see continued growth from ACM."

Muzammal said that the agreement underlines the firm’s commitment to institutional and retail FX. "This deal, plus our minority stake in FXCM, are important steps in our goal to make Refco the leader in retail FX," he said.

Refco bought a 20% stake in FXCM in January 2003, which it recently upped to 35%. Drew Niv, chief executive officer of FXCM in New York, said the investment has helped the firm attract larger institutional clients due to the name recognition and confidence the Refco name brings.