Perhaps the assumption that markets are still anchored by predictable economic policies needs to be challenged. For the first time since the fall of the Berlin Wall, political volatility – once background noise – is potentially reshaping investment risk at a structural level.
Despite authorities taking their foot off the environmental, social and governance pedal and recent volatility in equities and bonds, the benefits of Artificial Intelligence and improved investor transparency are just beginning.
London Stock Exchange sole bidder for Russell
(Pictured: Xavier Rolet)
Last week the London Stock Exchange confirmed it was in exclusive talks with Frank Russell Company parent – The Northwestern Mutual Life Insurance Company – regarding a potential acquisition of Russell.
The statement makes LSE the last buyer standing for the company, which was put on the block earlier this year by its parent.
Various reports value the deal at around $US3 billion and, if successful, would continue LSE’s push to become a diversified financial services player.
In May, when announcing the preliminary results for the year end to March, LSE chief executive Xavier Rolet said: “I am more optimistic than ever that our truly unique position – as the only global open access market infrastructure player which works in close partnership with its customers across all of our businesses – will position us well for the future.”
LSE’s revenue from traditional equity business is dwindling as a percentage of overall revenue for the exchange as other business segments take over.
Cash equities accounted for just 12 per cent of total revenue for the 12 months to end March, according to the preliminary accounts. Information services now make up 32 per cent of total revenue.
The LSE is probably most interested in Russell’s index business.
According to Russell’s website it “calculates approximately 700,000 benchmarks daily covering 98% of the investable market globally, including more than 80 countries and more than 10,000 securities.”
As at the end of last year approximately $US5.2 trillion in assets were benchmarked to the Russell Indexes.
Russell’s fund management arm had $US259 billion in funds under management at the end of March.
