The purchase, from private equity group Riverstone, is subject to regulatory approval and expected to be completed in the third quarter, Engelhart said in a statement that didn’t give the terms or the price of the deal.

Trading firms and hedge funds have piled into power markets from Japan to Scandinavia, as shock waves from Russia’s invasion of Ukraine super-sized price swings and generated huge profits for the companies that buy and sell electricity over the past two years. 

While other energy markets like oil have broadly cooled since then, de-regulation, the rise of renewable power generation and the extreme weather patterns associated with climate change, mean electricity grid supply is likely to remain volatile for the foreseeable future.

The deal will mean a return to large-scale physical commodity trading for Engelhart, which pared back its business that bought and sold cargoes of energy and metals to focus more on commodity derivatives, after a succession of loss-making years, following its spinning out from Brazil’s Banco BTG Pactual SA.

Trailstone specialises in trading and optimising renewable power-generating assets and has a natural gas supply and storage business in North America. Both companies have been investing heavily in technology and data management functions that are key to trading the 15- and 30-minute supply contracts for power.

Huw Jenkins, chief executive officer (CEO) of Engelhart, will run the combined business. John Redpath, Trailstone’s current head, will take the role of deputy CEO.