Investment giant Charles Schwab (SCHW) is buying private equity firm Forge Global (FRGE) for $660 million U.S.
The deal comes as traditional investment management companies and brokerages seek to give their clients greater access to private equity and private companies.
Forge Global operates a trading platform that enables investors to buy shares in companies that are not yet publicly traded.
Forge claims that investors using its platform have bought and sold more than $17 billion U.S. in private company shares.
The race to bolster private equity offerings comes after U.S. President Donald Trump pledged to allow such investments in Americans’ 401(k) retirement plans.
There is growing demand among individual retail investors for access to pre-IPO companies and privately held fast-growing startups.
These include companies such as OpenAI, SpaceX, and TikTok-parent company ByteDance.
The deal will see Charles Schwab pay $45 U.S. per share for Forge Global, a premium of 72% over the stock’s closing share price on Nov. 5.
Forge Global’s stock surged 67% in premarket trading on news of the acquisition.
Last month, Wall Street investment bank Morgan Stanley (MS) acquired private shares platform EquityZen that is a rival of Forge Global.
Forge Global went public in 2021 through a special purpose acquisition company (SPAC) deal. Since then, the stock had fallen 84% to trade at $26.12 U.S. per share.
Charles Schwab has traditionally offered wealth management, brokerage, banking, and financial advisory services to its customers. It has $11 trillion U.S. in assets under management.
The companies expect the deal to close in the first half of next year.
SCHW stock has risen 27% this year to trade at $93.68 U.S. a share.
