Tradeweb (Nasdaq: TW), a global operator of electronic marketplaces for rates, credit, equities and money markets, and MAXEX, a digital exchange for trading U.S. residential mortgage loans through a single centralized clearinghouse, this week announced a commercial collaboration with the goal of expanding access to the institutional marketplace for U.S. residential mortgages. Tradeweb has also made a strategic investment in MAXEX; financial terms were not disclosed.
Tradeweb and MAXEX plan to collaborate to advance a more centralized, transparent and institutionally scalable market for U.S. residential mortgage loans – one of the largest segments of global private credit. As part of this strategic collaboration, Tradeweb plans to connect its global network of more than 3,000 clients to MAXEX’s network of approximately 400 mortgage lenders and more than three dozen institutional investors. By integrating MAXEX’s centralized exchange and clearinghouse with Tradeweb’s electronic trading, data and workflow capabilities, this collaboration aims to enhance efficiency, transparency and liquidity in residential private credit while complementing the role of the GSEs.
MAXEX operates a centralized, end-to-end digital exchange purpose-built for institutional trading of residential whole loans. The firm addresses the mortgage market’s long-standing fragmentation and operational complexity through standardized contracts, centralized clearing and settlement, and seamless electronic execution. MAXEX has facilitated loan sales into more than 250 private-label securitizations as well as to the market’s leading portfolio investors and is one of the most active expeditors of private mortgage loan liquidity in the U.S.
The collaboration will also extend Tradeweb’s mortgage footprint beyond agency mortgage-backed securities (MBS), including the TBA and specified pool markets, into the rapidly growing private residential credit ecosystem, where institutional demand for high-quality, yield-generating assets continues to accelerate.
“Tradeweb has a proven record of transforming large, complex fixed income markets through electronic trading,” said Troy Dixon, managing director, co-head of global markets at Tradeweb. “Residential private credit represents a compelling next phase of that evolution as we continue to invest in core areas of organic growth for Tradeweb. Our commercial collaboration and investment in MAXEX reflect our conviction that its centralized exchange model, combined with Tradeweb’s global distribution, technology, and data capabilities, will enhance how institutional investors access and trade U.S. residential mortgage loans.”
“MAXEX was built to address the structural inefficiencies that have long constrained the residential mortgage secondary market,” said Tom Pearce, CEO, chairman, and co-founder of MAXEX. “Tradeweb is one of the most respected market operators in global fixed income. Together, we intend to bring institutional-grade infrastructure, transparency, and liquidity to a core segment of private credit that underpins the U.S. financial system.”
As part of the investment, MAXEX appointed two new board members: Dixon, and Marc Simpson from JPMorgan, which led a 2021 investment in MAXEX.
