London Stock Exchange Group (LSEG) has agreed to acquire The Yield Book and Citi Fixed Income Indices, a fixed income analytics platform and index business, from Citigroup for $685 million (£535 million) in cash.
LSEG has agreed to acquire The Yield Book and Citi Fixed Income Indices, a fixed income analytics platform and index business, from Citi.
The acquisition represents a significant opportunity for London-headquartered LSEG to enhance its fixed income data and analytics capabilities and strengthen its FTSE Russell index franchise, bringing an increase in benchmark AUM of around $2 trillion.
The deal substantially bolsters FTSE Russell’s footprint and product offering in the fixed income space – one of the fastest-growing segments of the ETF industry and an area where perhaps FTSE Russell has traditionally not been as strong – allowing it to challenge segment leaders like Bloomberg’s Bloomberg Barclays Indices and IHS Markit’s iBoxx.
The acquisition, which follows the purchase of the Russell Indexes business in 2014, enables FTSE Russell to offer a comprehensive fixed income index family and further position itself as one of the leading providers of underlying reference indices to fixed income ETFs.
Citi Fixed Income Indices is the underlying index provider to ETFs such as the $730m Xtrackers Global Government Bond UCITS ETF from Deutsche Asset Management and the $520m SPDR Citi International Government Inflation-Protected Bond ETF from SSGA.
Mark Makepeace, Group Director of Information Services and CEO of FTSE Russell, said: “The acquisition of The Yield Book and Citi Fixed Income Indices supports the continued strong growth and development of London Stock Exchange Group’s Information Services division. The acquisition represents a significant step for FTSE Russell to acquire a world-class fixed income analytics and index business
“I very much look forward to working together with the team at Yield Book and Citi Fixed Income Indices as we develop our businesses over the coming months.”
Okan Pekin, Global Head of Investor Services at Citigroup, added: “This transaction is a positive outcome for The Yield Book and Citi Fixed Income Indices for both clients and employees.
“As a result, these businesses will become part of a global financial market infrastructure group with a demonstrated track record of delivering high-quality index and analytics services to its clients.”
Highly respected by buy- and sell-side alike, The Yield Book analytics platform is operating in its third decade and serves approximately 350 institutions globally, while the index business has been producing fixed income indices for more than 30 years with approximately 300 clients globally.
The indices will continue to be maintained based on existing design criteria and calculation methodologies, and will continue to align with regulatory requirements such as the IOSCO principles.
The acquisition is anticipated to close in the second half of 2017, subject to regulatory clearance and other customary closing conditions. The existing leadership team and employees of The Yield Book will transfer with the business to LSEG.