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Nasdaq plans to spin off private equity trading into a separate business

20 July 2021
2 min.
Nasdaq plans to spin off private equity trading into a separate business

Marketplace for stock trading

Exchange operator Nasdaq Inc. plans to spin off its private equity marketplace into a separate segment in partnership with a group of US banks, including Goldman Sachs Group Inc (NYSE:GS). and Morgan Stanley (NYSE:MS), The Wall Street Journal reported.

As part of the deal, which could be announced on Tuesday, the Nasdaq Private Market platform will be spun off into a standalone company that will receive cash from the banks' investments. In addition to Goldman Sachs and Morgan Stanley, Citigroup Inc (NYSE:C) and SVB Financial Group, which owns Silicon Valley Bank, will be its investors.

Terms of the deal were not disclosed.

The agreement could allow the operator to increase the number of transactions on the Nasdaq Private Market, where shares of companies that have not yet held an IPO are traded, writes WSJ.

The volume of trading in those securities has been growing in recent years as startups take more time to enter the public market.

Most individual investors can't buy shares on Nasdaq Private Market and other trading venues for securities of companies that haven't had an IPO. Under current regulations, such transactions are usually only available to accredited investors who meet certain criteria. Including their condition must exceed $1 million and annual income of $200,000.

Nasdaq expects the agreement with banks will make Nasdaq Private Market a leading floor for trading shares of companies that are not listed.

Nasdaq Private Market was created in 2013 as a joint venture between Nasdaq and SharesPost, an online marketplace for trading such stocks. In 2015, Nasdaq acquired SecondMarket Solutions Inc. which was a competitor in this area, and integrated it into the business.

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