Deutsche Börse expands indexing capabilities with Axioma acquisition

Apr 10th, 2019 | By | Category: ETF and Index News

Deutsche Börse has announced its acquisition of US-based portfolio analytics specialist Axioma for $850 million.

Sebastian Ceria, CEO of Axioma.

Sebastian Ceria, CEO of Axioma.

Founded in 1998, Axioma is a global provider of multi-asset portfolio and risk management software. The company delivers proprietary solutions and data services to over 400 asset managers, asset owners, sell-side participants, and hedge funds globally.

Deutsche Börse and Axioma have had an existing partnership since 2011 and have jointly developed products including factor indices and ETFs.

Deutsche Börse plans to integrate Axioma within its own index businesses – STOXX and DAX – which are valued at around €2.6 billion.

Based on revenue generated over the past twelve months, Deutsche Börse currently has the fourth largest index business globally. It is also home to the most widely recognized European tradable index, the Euro Stoxx 50.

The combination of the three businesses will form a single entity, as yet unannounced. It will create a fully integrated buy-side intelligence player that will provide products and analytics to meet the growing demand for an end-to-end platform. The combined company is expected to achieve synergies of around €30m by 2022.

Deutsche Börse will gain access to Axioma’s buy-side and enhanced analytics platform that allows for the creation and testing of custom indices, while Axioma’s clients will benefit from closer integration to Deutsche Börse’s index family which may be used for designing investment strategies.

Sebastian Ceria, Founder and CEO of Axioma, said, “The union of Axioma, STOXX and DAX under the Deutsche Börse umbrella creates a growth company that is uniquely equipped to help clients capitalize on the critical trends now reshaping the investment-management landscape. The combination of STOXX’s indexing expertise with Axioma’s best-of-breed analytical capabilities in risk management, portfolio construction, and performance attribution is expected to result in strong near-term revenue synergies and creation of a platform for future growth.”

Stephan Leithner, Member of the Executive Board of Deutsche Börse, added, “We are convinced of the highly complementary nature of the combination, which positions us extremely well to benefit from key growth trends. We have a long-standing strategic partnership with Axioma and value its management. We look forward to growing our analytics and index platform together.”

As part of the transaction, Deutsche Börse has entered into a strategic partnership with equity investor General Atlantic which is acting as the main financier of the acquisition.

The deal is subject to approval by competition authorities and is expected to close in the third quarter of 2019.

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