Lynch Jones & Ryan, the 130-person New York commission recapture firm for plan sponsors, wants to grow through acquisitions. The firm, formerly private, was acquired last year by Reuters Group's Instinet.
When a large publicly-owned electronic agency brokerage acquires a small but dominant player, industry consolidation is not surprising.
Lynch, Jones, which ceded its soft-dollar accounts to Instinet to concentrate on commission recapture, expects to expand its annual total revenues at more than 30 percent, according to Howard Schwartz, chief executive at Lynch Jones. The firm had $110 million in revenue last year.
Lynch Jones has about 1,000 plan sponsors whose overall assets amount to $2 trillion. The firm's 21 agency traders handle roughly 8 million listed shares daily. The soft dollar accounts represented about 25 percent of Lynch Jones' traditional business.
For Instinet the Lynch Jones commission recapture business was a way to build immediate market share, Schwartz said. On the soft dollar side, Instinet's big plan is an online pay-per-view type service providing third party research. Instinet, meanwhile, allows Lynch Jones a way to provide expertise in OTC agency brokerage, Schwartz said.
