ED&F holds talks over brokerage unit - sources

Commodities firm ED&F has held talks in recent weeks with third parties about investing in its brokerage arm ED&F Man Capital Markets, according to sources close to the talks.

ED&F has held talks with some of its main broker rivals and private equity funds about investing in the London-based unit, according to the sources who said no agreement had been reached at the time of writing.

The sources said a private equity firm and an asset manager had made a joint proposal while another plan from a rival brokerage firm was dropped because the parties could not agree over the future management of ED&F Man Capital Markets, according to the sources.

A spokesman for the firm said: “ED&F Man Capital Markets is not ‘up for sale’ – it continually engages with third parties to explore growth opportunities that add value to the business.”

Details of the talks emerged less than two months after ED&F Man Capital Markets’ chief executive Stephen Hawksworth resigned after six years in the role and left the firm with immediate effect, as first reported by Global Investor.

A spokesman for ED&F Man Capital Markets said on 27 August: “I can confirm that Stephen Hawksworth has stepped down from his role as chief executive of ED&F Man Capital Markets Europe.”

Sources said at the time Hawksworth resigned to Chris Smith, the chairman of ED&F Man Capital Markets who was chief executive until the end of 2013.

ED&F Man Capital Markets said on 10 September it had hired Terry Hollingsworth, formerly Citigroup’s global head of its futures, clearing and collateral client executives sales team, as its managing director and head of institutional sales for listed derivatives.

ED&F Man Capital Markets was fined £180,000 by the LME at the start of August for failing to detect suspicious trading routed by one of its clients to the London exchange.

ED&F Man Capital Markets said in April it had decided to shut its UK equity finance business “to focus on our core listed exchange business in London”.

ED&F Man Capital Markets, which acts as a broker of commodities, currency, equities, fixed income and derivatives from 10 offices around the globe, competes with bulge bracket banks and specialist brokers to execute trades on behalf of financial and corporate clients.

Brokers have argued that tough post-financial crisis regulation, including Europe’s vast Mifid II that took effect in early 2018, have hit mid-tier brokers because they lack the technology and regulatory resources of their larger banking rivals.

Established in 1783, ED&F Man is an employee-owned agricultural commodities merchant with 7,000 people in 60 countries, according to its website.