Stock exchange Chi-X Australia along with Chi-X Japan and Chi-Tech Hong Kong have been sold for an undisclosed amount to global private equity house JC Flowers & Co by its investment bank owners, including majority owner Nomura.
The sale had been rumoured to be on the cards for the past six months and follows the purchase of Chi-X Canada by Nasdaq in December.
"The Chi-X businesses have established themselves as successful and innovative alternatives to primary exchanges," said Thierry Porte, managing director of JC Flowers & Co, said in a statement. JC Flowers invests exclusively in financial services.
"Their superior technology, service and trade execution performance will continue to drive positive change and improve markets where they operate. We hope to accelerate this growth through continued enhancements to the platform, including new investment products and markets, and by leveraging our strong relationships throughout the Asia Pacific region."
Chi-X Australia chief, John Fildes told Fairfax Media he will be staying on as chief after the deal is finalised by the end of March.
"I am definitely staying here. I am very excited about it," he said. Mr Fildes worked with Mr Porte as head of electronic trading at Morgan Stanley when Mr Porte headed up its Japanese business.
"I think it is great for the company. At a time when we have launched a series of new innovative platforms, including warrants and we will soon offer ETFs, JC Flowers has bought the company understanding our plans and wanting to back those and will want to grow the company even more aggressively," he said.
Chi-X Global owned Chi-X Australia, but the ultimate owners were Nomura's Instinet, and minority owners UBS, Bank of America Merrill Lynch, GETCO LLC, Goldman Sachs, Morgan Stanley, and Quantlab Group LP.
Chi-X Global chief Tal Cohen said in the past five years Chi-X "had become an integral part of the financial markets in Asia Pacific through our commitment to competition and innovation".
Chi-X Australia has been upping the ante against competitor ASX Ltd with the launch of several new products including warrants and soon exchange traded funds in addition to its share trading business.
It has now reached a 20 per cent share of Australian share trading volume and made its first profit in 2015 after four years operating in Australia. But Mr Fildes has said the investments it is making will likely mean that won't be repeated in 2016.
JC Flowers has about US$8 billion ($11.4 billion) in investments. It also has stakes in Shinsei Bank of Japan, KT Capital Corporation, a Korean non-bank finance company and SICOM Ltd, a provider of financial solutions and advisory services in India.