Tuesday 20 July 2021 2:04 pm

Nasdaq set to spin out market for pre-IPO shares in deal with banks

The exchange operator announced a new joint venture with SVB Financial Group (SVB), Citi, Goldman Sachs, and Morgan Stanley that will allow investors to trade in stocks of private businesses.

As part of the spin out of its exchange for private businesses, Nasdaq Private market will become a standalone, independent company and receive investments from the banks, Nasdaq said in a statement on Tuesday.

The new venture will “develop a full suite of liquidity solutions for private companies” where pre-IPO firms, brokers and investors can access, connect, manage and execute their private stock transactions, Nasdaq said.

The new platform will still include dealings such as tender offers, auctions and investor block trades that Nasdaq Private market has enabled private companies to undertake since it launched in 2014.

SVB CEO Greg Becker said the new trading venue would offer clients “a path to employee retention in an environment where access to talent is one of the biggest challenges.”

“Innovation companies are staying private longer and need the ability to offer their employees a safe and easy way to generate liquidity while they are building their businesses,” Becker added.

“Today’s announcement highlights our optimism about the evolution of the private markets,” said representatives at Citi, Goldman Sachs and Morgan Stanley. “We have a long history of jointly supporting market structure innovation and fostering liquidity in the secondary markets.”

Financial terms of the deal have not been disclosed.