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Screenshot of a breaking news alert e-mail from Q2 2017
Breaking Forex News… Cyprus based retail FX broker IronFX has announced that the company has arranged a $100 million investment from a major family office investment outfit. We understand that the family office is out of the Middle East, and that the investment will be made by the family office’s regulated fund based in Singapore.
The investment will be made in several tranches, with the first tranche (which we believe is in the $10 million+ range) to be made immediately.
We understand from sources close to the negotiations that the investors will initially receive one seat on IronFX’s board of directors, and will receive more board seats as further tranches of the investment are made.
The plan apparently is to use IronFX as a platform for acquisitions and consolidation in the FX industry. As LeapRate has written numerous times in recent months, smaller players in FX industry are finder it tougher to make money in the face of tougher regulations and increased competition, providing good opportunities for deeper pocketed, larger brokers to pick off competitors.
We also understand that the new investment does not really affect one way or another IronFX’s long-delayed merger with FXDD, Forexware, and Nukkleus Inc (OTCMKTS:NUKK), a company controlled by longtime FX industry executive Emil Assentato. Mr. Assentato has an effective 80% interest in both FXDD and Forexware via Currency Mountain Holdings which he controls (Tradition et Cie owns the other 20% in each), and he fully owned Nukkleus heading into the planned transaction. That deal may or may not go ahead, but if it does it will be with a much-strengthened IronFX.
We would also note that over the past year or so there has been a lot of “fake news” circulating about IronFX, with one or two lightly-read FX blogs in particular seeming to have a particular vendetta against IronFX and its controlling shareholder Markos Kashiouris. Titles of articles covering IronFX included wording such as “fraudulent”, “corruption”, “ham-fisted”… We would also note that a quick web search shows that many if not all of those fake-news articles have since been taken down by the blog(s) in question, without any announcement, explanation or apology having been made.
Commenting on the investment, IronFX CEO Markos Kashiouris stated:
Over the past eight years IronFX has established itself as a global retail FX business and brand focusing on quality of service, wide and sophisticated product range, impeccable execution and localised presence. We are now ready to expand our capital base to ensure the next phase of the Company’s growth.
Our ability to attract sizeable investment and the quality and reputation of our new international partners demonstrates the significant strides made by the Company over the past years, as well as its current market position and future outlook. It also signifies an important foreign direct investment and a vote of confidence in the Cyprus financial sector where the large majority of the Company’s operations are located. This reflects the fact that Cyprus combines many favourable features that make it a unique investment destination since, among others, investment firms are subject to a robust fair and proactive supervisory environment.
We are pleased to be welcoming an institutional investor that shares our vision about the evolution of the market and our differentiated value proposition. The Company is aiming at expanding its partnerships, brands, account management force, offices as well as effect further operational enhancements and automations that will drive both top and bottom line growth. IronFX will also be looking for acquisition opportunities in the broader retail and institutional FX sector.
The full press release (minus the quote from Mr. Kashiouris posted above) reads as follows:
IronFX successfully concludes agreement to raise US$100 million from strategic family office investor
IronFX is aiming to use the funds to further expand its global footprint
IronFX (the “Company”) has successfully concluded an agreement with a prominent MENA region family office investor for a strategic investment of $100 million, which will be made in tranches to fund its growth capital needs.
IronFX is aiming to expand its markets of coverage and launch additional brands, as well as, acquire existing brands and books of business. The initial investment into the Company has already been completed.
The additional investment tranches are set to be completed during the course of the next twelve months and will be subject to regulatory approvals.