Goldman sells off its entire LMAX stake

David Hellier
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INVESTMENT bank Goldman Sachs has sold out its investment in LMAX, the online trading platform owned by Betfair.

The bank’s exit comes as the platform struggles to live up to its earlier expectations. Its chief executive left last year as trading volumes failed to live up to hopes.

Betfair said that its decision to invest a further £10m in LMAX diluted Goldman’s 12.5 per cent shareholding to less than five per cent, meaning it no longer qualified for a seat on the board.

Former equity trader Phil Hylander, Goldman’s representative, who has himself retired from the bank, subsequently stepped down from the LMAX board and Betfair bought out the bank’s residual holding.

Betfair said yesterday: “As announced in last year’s preliminary results, we invested a further £10m into LMAX which in effect diluted the Goldman Sachs holding to the point where they no longer qualified for a place on the board. It does not bring to an end their involvement in LMAX as they are still the lead market makers and very much Exchange partners. LMAX continues to perform well and we are pleased with the volume growth this quarter.”

Last year Betfair’s outgoing chief executive David Yu said about LMAX: “I think it’s fair to say that it’s been a mixed success.” Yu went on to say that whilst the technology had met expectations, registrations to the site had not. However, there are signs that the volumes are beginning to come. Last month’s forex trading volumes touched $16bn, according to the latest figures.