With the acquisition of r8fin, Tradeweb is integrating multiple liquidity pools for cash and futures

“We are developing an integrated approach to accessing the U.S. Treasury market across multiple cash and futures liquidity pools – and r8fin is an important part of this approach.”

Tradeweb Markets Inc. has completed the acquisition of r8fin, a technology provider specializing in algorithmic execution of U.S. Treasury bonds and interest rate futures.

This acquisition, announced in November 2023, aims to integrate r8fin's intelligent execution capabilities into Tradeweb's U.S. Treasury electronic trading platform. This integration will help clients take a comprehensive approach to trading U.S. Treasury bonds and related futures.

Tradeweb integrates multiple liquidity pools for cash and futures

Billy Hult, CEO of Tradeweb, commented: “We are developing an integrated approach to accessing the US Treasury market through multiple cash and futures liquidity pools – and r8fin is an important part of this approach.” This acquisition is entirely in Tradeweb’s best interests and we believe it represents a significant step forward in how electronic trading can open up new opportunities for relative value hedge funds and other clients. We are also pleased to welcome r8fin co-founder Assad Fehmy to Tradeweb.”

The acquisition is expected to modestly increase Tradeweb's revenue growth and operating margins and be accretive to 2024 earnings per share.

r8fin's technology, which includes algorithm-based tools and a thin-client execution management system (EMS), supports futures and cash trades. In 2023, r8fin enabled the algorithmic execution of an average of over $24 billion in U.S. Treasury securities and 375,000 futures contracts per day. Its customer base includes various financial institutions such as hedge funds, trading firms and primary dealers.

Founded over 25 years ago, Tradeweb is the leading electronic trading platform for U.S. Treasury securities. The company has an extensive network covering institutional, wholesale and retail markets. In 2023, Tradeweb reported that U.S. Treasury bond trading facilitated an average of $146 billion per day.

In April 2023, Tradeweb Markets completed the technology integration of Nasdaq's electronic fixed income trading platform, formerly known as eSpeed, which it acquired two years ago in a $190 million cash transaction. Since then, Nasdaq's Central Limit Order Book (CLOB) for electronic trading of on-the-run U.S. Treasury securities (OTR) has served Tradeweb's wholesale customers through Dealerweb.

Fixed Income Resurgence Driven by High Interest Rates, Geopolitics and Volatility

Tradeweb Markets Inc. reported total trading volume of $28.9 trillion in December 2023, with an average daily volume (ADV) of $1.46 trillion, a significant increase of 43.3% year-on-year.

In the fourth quarter of 2023, total trading volume reached $104.4 trillion and ADV was $1.68 trillion, representing a remarkable year-on-year growth of 56.9%. Notably, the average variable fees per million dollars of trading volume were $2.54.

The resurgence of fixed income is due to historical interest rate movements, geopolitical uncertainty and market volatility. According to the report, U.S. Treasury ADV increased 39.8% year-over-year to $159.5 billion, supported by growth across all client sectors and continued market volatility.

European government bond ADV rose 21.5% year-on-year to $33.4 billion, driven by continued interest rate market volatility and hedge fund activity. Mortgage ADV rose 34.1% year over year to $175.1 billion, helped by the recovery in the broader rates market.

In US all-electronic credit, ADV increased 56.4% year over year to $5.6 billion, with Tradeweb capturing a record 18.2% share of US all-electronic High Grade TRACE. European loan ADV increased 26.2% year over year to $1.6 billion, driven by strong activity in portfolio trading and Tradeweb Automated Intelligent Execution.

Tradeweb also reported on its stock trading metrics, including the US ETF ADV, which rose 44.3% year-on-year to $10.9 billion, while the European ETF ADV rose 29.1% year-on-year to $3.2 billion. Dollar rose. Institutional platform volumes were robust in both the US and Europe, with US volumes increasing 12.8% year-on-year.

In money markets, the ADV repurchase business recorded a significant increase of 34.2% year-on-year to $508.7 billion, driven by increasing customer adoption of Tradeweb's electronic trading solutions. These achievements culminated in a total ADV for December 2023 of $1.46 trillion, a year-over-year increase of 43.28%.

ADV for the fourth quarter of 2023 reached $1.68 trillion, representing strong year-over-year growth of 56.9%. The total ADV for fiscal year 2023 was $1.44 trillion, a notable increase of 27.56% year-on-year. The bold numbers in the data indicate records for the Tradeweb platform across different asset classes and products.

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