Virtu Financial seeks $2.6bn from listing

Virtu Financial, a US electronic market maker, is poised for a stock market listing this month in a move that will test investors' attitude to the controversial practice of high-frequency trading.

The group is seeking to raise up to $361m from its listing on Nasdaq, restarting a process that was put back a year ago amid the furore caused by the publication of Michael Lewis's Flash Boys.

In a filing with US regulators on Monday, Virtu confirmed it was seeking to offer 16.5m shares at between $17 and $19 a share. The move would give it an equity valuation of around $2.6bn, lower than the $3bn it was seeking 12 months ago. The underwriters also have the option to purchase another 2.5m shares in the flotation if demand warrants.

Its success or otherwise will help decide if some asset managers and long-term investors - who are often cited as the victims of aggressive trading strategies - have moved on from last year's fracas over high-frequency trading and are now willing to buy shares in what would be the first listing of a proprietary electronic trading business.

In the wake of Flash Boys ' publication, US regulators have begun a review of US market structure. A number of market participants, from traders to exchanges, have been fined by the US Securities and Exchange Commission for breaking trading rules.

Virtu is one of the largest traders in global equities, commodities and foreign exchange, making money on the difference in the spread at which assets are traded. It has drawn attention for its disclosure that it has lost money on just one of the last 1,485 trading days. The statistic is largely due to the size and frequency of its bets in the market. Just under half of trades are profitable.

Revenues at the company rose 9 per cent to $723m while net income rose 4.3 per cent to $190m in 2014. It also estimated that in the three months to March 31, quarter-on-quarter revenues rose between 21 per cent and 30 per cent to $210-$225m. In the same period, net income rose between 44 per cent and 55 per cent, to $70-$76m.

The IPO will help Silver Lake Partners, a US private equity group and long-time backer of Virtu, sell down part of its 10.7 per cent shareholding.

The listing is being lead by Goldman Sachs, JPMorgan and Sandler O'Neill + Partners.

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