Goldman Sachs is making a $20.5 million investment in the high-frequency trading technology company Perseus, which provides telecommunications capabilities to financial firms. The deal illustrates the growing value Wall Street's biggest banks are placing on high-speed trading.
The transaction, which would give Goldman a minority stake in Perseus, bolsters the bank’s reach in the world of high-frequency trading, where microsecond advantages can mean the difference between a profit and a loss.
Increased technological competition has made technologies like those offered by Perseus a necessity for major financial institutions. Perseus, which derives the majority of its profits from banks like Goldman, contracts with trading firms, trading platforms and more than 300 exchanges and markets worldwide to execute trading orders at near-instantaneous speeds. In addition to its extensive fiber-optic networks, the company also runs microwave transmission towers, which beam information thousands of miles between trading hubs like Chicago and New York.
In a statement, Goldman’s director of specialty lending, Terry Doherty, said, “We see a great opportunity” in Perseus, noting the company’s “potential to dramatically shift the way that the global markets engage by introducing faster and more secure managed services to the industry.”
The move shows Goldman doubling down on its algorithmic and high-frequency trading operations, even as some of its competitors, like Bank of America, have retreated from the field following an increase in regulatory scrutiny.