Barclays has agreed to divest its benchmark indices and risk analytics business, Barclays Risk Analytics and Index Solutions (BRAIS), to Bloomberg for £520m.
The deal will expand the Bloomberg’s investments in the index business as well as drive further value to Bloomberg clients, as these indices will be integrated into Bloomberg’s analytic dashboards, portfolio analytics, order management systems, and execution management systems.
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Barclays said that the sale of BRAIS will result in a pre-tax gain of about £480m and increase its CET1 ratio by about 10 basis points.
Subject to various conditions, including anti-trust approval, the transaction is scheduled to complete by mid-2016.
The transaction will also include the sale of intellectual property in POINT, Barclays’ portfolio analytics solution, and incorporating BRAIS IP into Bloomberg’s multi-asset portfolio risk and analytics tool, PORT.
Under the deal, Barclays will continue to operate POINT for 18 months post completion to help clients transition to other providers, including Bloomberg’s PORT product.
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By GlobalDataAdditionally, Barclays will retain its quantitative investment strategy index business, with calculation and maintenance of its strategy indices outsourced to Bloomberg.
Furthermore, the two parties will maintain a co-branding arrangement on the benchmark indices for an initial term of five years.
BRAIS is provider of benchmark and strategy indices, portfolio analytics, risk and attribution models, and portfolio construction tools. Its benchmark indices cover global markets including multiple asset classes, particularly the Barclays Family of Aggregate Bond Indices.
Bloomberg global head of financial products J.P. Zammitt said: "BRAIS’s talented team will bolster our investments and help us continue to innovate around better creation, sharing, publishing and benchmarking tools, as well as portfolio and risk analytics."
Barclays Group CEO Jes Staley said: "This transaction is further evidence of the good work we are doing in managing down our Non-Core assets so that shareholders can feel the full benefit of ownership of Barclays’ well-performing Core businesses."
