Virtu Financial is in talks to trade on behalf of Union Investment, a major German asset manager, in one of the clearest signs yet that high-frequency trading is becoming widely accepted by Europe's traditional investment community.

The deal, which would see Virtu execute trades on an agency basis for Union in Europe, is set to be one of the first of its kind in the region bringing together a leading electronic market-maker and an asset manager with more than €260 billion in client assets.