Hot on the heels of its recent acquisition of Wall Street Horizon, TMX Group, the Toronto-based market operator and data and analytics provider, has acquired approximately 21% of the common equity of VettaFi Holdings LLC, a US-based, privately owned data, analytics, indexing and digital distribution company, for US$175 million.
VettaFi provides a comprehensive suite of global indices through its index factory, ETF services including ETF trends and analytics, a global ETF database, and distribution.
The deal marks a continuation of TMX’s strategy to grow the data it offers to customers through its information services division, TMX Datalinx, explains Jay Rajarathinam, TMX Group’s Chief Operating Officer.
“We think of ourselves as a financial information business,” he says. “And we see a lot of requests from clients for more services, more unique data content and more analytics capabilities. The index space is especially interesting right now, because of the trend over the past few years towards passive investing and ETFs. We have a very dominant position with ETFs at TMX, with over 900 listed ETFs on the Toronto Stock Exchange, which represents over 99% of the AUM across all marketplaces in Canada. But we don’t want to take that for granted, we want to add all the services that ETF issuers require. And one of the things they look for is indices that the ETFs can track, so we see a big opportunity there around custom indices, thematics and so on.”
The investment in VettaFi will also help TMX grow outside of its home market of Canada, says Rajarathinam. “We already have a fairly global client base. Even for our Canadian datasets, more than 50% of the TMX Datalinx revenues come from outside Canada,” he says. “We want to continue expanding that and we also want to create more globally relevant products. The investment in VettaFi opens the door for us to have more global products and datasets that go beyond Canadian financial data.”
He continues: “The combination of partnership and investment gives us two things. One is the opportunity to be in the front row seat of VettaFi’s strategy and direction. And two, it injects capital for VettaFi to pursue growth.”
Rajarathinam, along with John McKenzie, Chief Executive Officer of TMX Group, will join the VettaFi Board of Directors, effective immediately.
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