With the news that R.J. O’Brien & Associates, Inc. (RJO), one of the oldest private futures brokers, took on partners in an attempt to capture more market share as futures continue to display dynamic growth, the street was abuzz. The two private equity firms, Spectrum Equity Investors and Technology Crossover Ventures (TCV), together will hold a combined majority stake in the company, while the O’Brien family will retain a substantial minority ownership.
The restructured board will consist of current R.J. O’Brien Chairman John O’Brien, RJO CEO Gerald Corcoran, RJO President Colleen Mitchell, three representatives from Spectrum and three representatives from TCV, once the transaction is complete. Corcoran will take on the chairmanship upon close of the transaction.
Despite predictions that the private equity boom is near a bust, RJO CEO Gerald Corcoran and RJO President Colleen Mitchell, in an interview shortly after the announcement, said the move was positive and stressed that RJO will continue as they have but with more resources to execute their growth strategy.
Mitchell said, “It is an opportunity for us to continue the RJO legacy. We have been doing things well for 93 years and we anticipate taking our reputation and high level of client services and continuing to grow it in the U.S. and also internationally.”
That strategy will include possible acquisitions and a greater international presence.
Corcoran added: “We really want to expand our reach globally. Both in attracting new customers overseas as well as expanding our market share in the foreign futures market space.”
Corcoran points out that their new partners have a history of investing in successful tech companies.Some of the firms Spectrum and TCV are invested in include, RiskMetrics Group, Expedia, e-harmony and netfllix. Both have more than $4 billion in investments. “They really know how to invest in companies were technology is important to the success of the firm,” Corcoran adds.
The deal also raises the specter of an initial publics offering, though Corcoran says, there are no plans for one as yet. “An IPO has always been an opportunity for the O’Briens and it will remain an opportunity under the new structure but there are no immediate plans for an IPO. We could have done an IPO but we rather stay private and have the flexibility to run the business with a lot of oversight from the public markets.”
Corcoran told us he wants to see RJO move to the top 10 in Futures’ annual listing of Top Brokers, measured by customer segregated funds. “We want to be in the top 10 soon…We are totally psyched about this.”
