Nasdaq, SVB Financial Group (SVB), Citi, Goldman Sachs, and Morgan Stanley have announced a joint venture to establish an institutional-grade, centralised secondary trading venue for issuers, brokers, shareholders and prospective investors of private company stock.
Nasdaq Private Market will be contributed to a standalone, independent company, which will receive strategic investments from SVB, Citi, Goldman Sachs, and Morgan Stanley.
Nasdaq Private Market’s existing technology, client relationships, and regulatory infrastructure will provide a strong foundation for the joint venture to develop a full suite of liquidity solutions for private companies. Private companies, brokers and investors will be able to access, connect, manage and execute their private company stock transactions through a global marketplace and customised technology solutions. These tailored solutions allow private companies, brokers, and investors to have increased transparency into their program and trade criteria. The platform will continue to manage and support private company stock transactions including tender offers, buyside book-building, auctions, investor block trades, company directed windows of liquidity and pre-direct listing continuous trading. In addition, the platform will provide end-to-end settlement process management and an inter-broker global marketplace through its existing alternative trading system for all customers from employees to institutions to access and transact.
These new capabilities will help fulfil unmet market demand and provide a more transparent and efficient offering for private companies, their employees and investors looking for access to private assets. The platform will build a unique distribution network, leveraging the joint venture partners’ strong relationships with private companies and investors. In addition, institutional investor participation will be enhanced through the platform’s broker-sponsored and broker-neutral design, which is open to qualified broker-dealers.
“Since we launched Nasdaq Private Market in 2014, we have created a trusted platform for private companies resulting in a strong track record and robust pipeline of secondary transactions,” says Nelson Griggs, President, Nasdaq Stock Exchange. “This joint venture will accelerate our opportunities in the private company secondary trading market and establish the standard for technology-driven operational efficiencies, compliance and execution.”
“The private markets are anything but standard and have become more diverse than ever,” adds Eric Folkemer, President, Nasdaq Private Market. “Using the scale and distribution of our joint venture partners alongside our market leading technology and markets experience, Nasdaq Private Market will become the go-to marketplace that connects and manages the need of the entire private ecosystem through one platform.”
“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,” says Greg Becker, CEO of SVB Financial Group, parent company of Silicon Valley Bank. “Together with Nasdaq and this impressive consortium of leading banks, we are establishing a secondary trading venue for private company stock that will offer our clients a path to employee retention in an environment where access to talent is one of the biggest challenges.”
“Today’s announcement highlights our optimism about the evolution of the private markets,” say 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.”