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

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Looking for a way to keep warm during the cold weather or rather alleviate your cold while under the weather?