Man Group PLC is taking a large stake in Eurex’s U.S. business, with an eye on building it up.

Man Group, the alternative investment firm, which is also one of the world’s largest futures brokers, and Eurex, the world’s largest derivatives exchange, announced that they have entered into agreements that will further develop the U.S. Futures Exchange LLC (formerly known as Eurex U.S.). They say that the USFE will expand the derivatives market by serving as a product incubator and innovator to create new listed products.

Under the terms of the transaction, Man Group will purchase 70% of Eurex’s shares in the USFE for US$23.2 million in cash, and inject a further US$35 million into the USFE. Deutsche Börse Systems, the developer and operator of the Eurex platform and network, will continue to operate the trading platform and corresponding communications network for the exchange.

The USFE will offer new products targeted at buy-side customers such as hedge funds and retail investors. “The goal is to expand the volume in listed derivatives by broadening the range of exchange traded products to new and existing user groups, rather than competing with established futures exchanges,” it says.

Man Group plans to reduce its stake in the USFE over time to below 50% by inviting other trading institutions, including hedge funds and financial services firms, to join the partnership with an equity position. Eurex will retain a stake of approximately 30%.

Kevin Davis, chairman and CEO of Man Financial, the brokerage division of Man Group, will serve as chairman of the USFE. Satish Nandapurkar will be CEO. He will also be a member of the exchange’s board.

“This partnership is an exciting opportunity for the futures industry and the customers we serve,” said Davis. “On the basis of a robust and highly scalable global platform, together with additional partners, we will pioneer the creation of innovative products. Man’s long experience serving its global customer base, combined with Eurex’s renowned expertise in operating an electronic trading platform, will create a distinct regulated exchange that will give the market place additional trading opportunities.” Davis added that Man Financial is rapidly adding new customers around the world and he sees significant demand for additional futures products.

Andreas Preuss, CEO of Eurex, said, “With this new relationship, Eurex adds a new dimension to its well established core product range. Together with our partner, we will reach out to new target groups with innovative products. USFE will offer products that have not previously been available in an exchange environment.”

Man Group was advised by Lazard New York on this transaction.