Man Group, the hedge fund giant, has made a $600m (£330m) bid for the global futures business being sold by Dutch bank ABN Amro and is understood to be one of the favourites to win the auction.
More than 20 companies are believed to have made offers for the operation, which handled more than $3bn of customer business last year. But the auction has narrowed to just two bidders - Man and the Swiss bank UBS.
Man, which has just completed the $323m purchase of bankrupt futures trading group Refco, would be propelled into the top league of derivatives trading companies if it clinched the ABN Amro deal.
The operation is particularly strong in the far east, in Australia and on commodities markets such as the Chicago Mercantile and Nymex in New York.
ABN Amro decided to review its ownership of the operation as part of a reorientation of its investment banking operations. The Dutch giant has decided it is no longer going to try to compete with the market leaders such as Goldman Sachs, Morgan Stanley and UBS, and instead is going to concentrate on middle-market companies often ignored by the big boys.
The move has raised questions about the future of some of its stockbroking operations in the UK, where it owns Hoare Govett, once one of London's leading brokers.
ABN Amro is selling its futures operation in the midst of a boom fuelled by record oil and metals prices. Last year turnover of futures contracts rose 12 per cent to 9.9 billion contracts.
"This is a good time to be selling these types of business," said Christopher Wheeler, an analyst in London with the US broker Bear Stearns. "The view might be that they can't compete with the big boys [such as Goldman Sachs]."
Man refused to comment on market speculation, but it is well known to be interested in expanding its futures side to diversify away from its highly successful hedge fund business. The success of this investment side has led to Man shares more than doubling in value in the past year.
Led by Stanley Fink, the group split from its commodities trading arm ED&F in the late 1990s and now has over $48bn under management in various funds.Reuse content