Citadel Securities, the global-trading sister company of hedge fund manager Citadel, sold a minority stake totaling $1.15 billion to Sequoia Capital, a venture capital manager, and Paradigm, a cryptocurrency manager.
The minority investment stake values the firm at about $22 billion, Citadel Securities said in a news release Tuesday.
The funds will be used to enhance growth and may lead to an initial public offering later, said people with knowledge of the plans who asked not to be identified.
Citadel Securities did not immediately respond to a request for the size of the minority stake, when the deal closed or whether the firm is considering an IPO.
Sequoia led the investment with funding coming from several of its investment funds and Sequoia Partner Alfred Lin will join Citadel Securities' board of directors.
"In Sequoia and Paradigm, we have partners that appreciate how the strength of our market expertise, advanced predictive analytics and superlative software engineering can redefine an industry," said Kenneth C. Griffin, chairman of Citadel Securities and founder, CEO and co-CIO of Citadel, in the release.
The minority stakeholders will assist Citadel with technology advances, said Peng Zhao, Citadel Securities' CEO, in the release.
"As technological innovation in financial markets becomes only more important, we see enormous opportunities to meet the needs of our clients across more markets and more products. Our partnership with Sequoia and Paradigm puts us in an even stronger position as we continue to scale our business," Mr. Zhao said.
"We look forward to working with the Citadel Securities team as they extend their technology and expertise to even more markets and asset classes, including crypto," said Matt Huang, Paradigm's co-founder and managing partner," in the release.
Citadel manages about $43 billion in hedge funds.
Bloomberg contributed to this story.