Hedge Fund Manager Scoops Up Grain Exchange Seats

Apr 30 2014 | 11:09am ET

A hedge fund manager has been buying up seats on the Minneapolis Grain Exchange, doubling their price.

Horizon Kinetics CEO Murray Stahl has bought 13% of the seats on the MGEX, the last independent grain exchange in the U.S., Reuters reports. The exchange is still owned by its members, avoiding the industry consolidation that has seen most U.S. exchanges de-mutualize and consolidate.

Seat prices on the exchange have doubled over the past year as Stahl snapped them up, and now go for nearly $200,000.

The MGEX’s most important contract is in spring wheat futures, with Canadian farmers using the exchange to hedge risk in the two years since the Canadian Wheat Board’s grain monopoly ended. Stahl joined the bourse’s board in October—and the exchange recently proposed increasing individual ownership limits from 20% to 35%.

Stahl’s plan for his cache of 53 seats is not clear. In a recent conference call, he called the investment “strategic,” which could mean he hopes it will be swallowed by one of its larger competitors, such as the CME Group, which a year-and-a-half ago bought the Kansas City Board of Trade for $126 million.

Others speculate that he may plan to list Horizon products on the MGEX, although exchange CEO Mark Bagan told Reuters that it “would be news to me.”


In Depth

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Saxby: Not All EBITDA Is Created Equal

Nov 30 2017 | 8:02pm ET

Record levels of dry powder are driving competition among private equity firms to...