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March 22, 2022

LSEG to offload wealthtech platform to US private equity firms for $1.1bn

London Stock Exchange Group (LSEG) has agreed to divest its wealthtech platform to US private equity firms Clearlake Capital Group and Motive Partners for a total cash consideration of $1.1bn.

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  • The report analyzes the APAC wealth and retail savings and investments markets. This includes affluent market size, both by number of individuals and the value of their liquid assets.
  • The affluent population grew by 5.3% in 2021 and is expected to grow at an AAGR of 4.8% between 2022 and 2026.
  • The value of liquid assets held by the affluent segment surged by 8.4% in 2021, backed by economic recovery. HNW individuals’ financial wealth grew by 12%, while mass affluent individuals’ wealth grew by 6.0%.
  • The report provides an analysis of factors driving liquid asset growth. It is also split into asset classes - equities, mutual funds, deposits, and bonds.
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by GlobalData
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The transaction is expected to conclude in the second half of this year.

The to-be-sold business, which is collectively called BETA+, consists of BETA, Maxit and Digital Investor. 

It provides back-office processing solutions to wealth managers, such as securities processing and tax reporting. 

The business was acquired by LSEG as part of its $27bn takeover of financial data provider Refinitiv in August 2019.

In the year ended on 31 December 2021, BETA+ reported revenues of approximately $300m, majorly linked to US markets.

The deal comes as LSEG looks to deal to cut its debt and offer returns to shareholders following Rifinitiv acquisition, according to multiple media sources.

The firm said the sale would de-lever it towards the middle of its leverage range.

It also plans to return a significant proportion of the net proceeds to shareholders through a buyback programme, which is expected to begin in the third quarter of the year. 

LSEG Data & Analytics group head Andrea Stone said: “The divestment of BETA+ will focus LSEG’s Wealth business on meeting our customers’ needs in high growth areas. This includes the provision of data, analytics and workflow tools where we have deep capabilities and where LSEG is driving innovation.”

As part of the deal, LSEG signed long-term strategic partnership with BETA+ and portfolio companies owned by Motive and Clearlake for data, content and tools.

The partnership will offer new, recurring revenues for LSEG through access to new client segments, it said.

Both divestment of BETA+ and the partnership is expected to drive the wealth segment of LSEG’s Data and Analytics business, which will now seek mid-single digit annual revenue growth in the medium term.

Stone added: “The partnership with BETA+ under its new owners offers a platform for further revenue growth in content and data while ensuring continuity for customers under a new owner focused on this segment of the market.”

Last month, LSEG struck a deal to buy TORA, a cloud-based trading technology solutions firm, in a $325m deal.

It followed the group’s agreement to acquire Quantile Group in December 2021.

Free Report
img

Analyze opportunies within the wealth management market in APAC

GlobalData’s ‘Asia-Pacific Wealth Management: Market Sizing and Opportunities to 2026’ report provides a comprehensive overview of the Asia-Pacific (APAC) wealth management market.
  • The report analyzes the APAC wealth and retail savings and investments markets. This includes affluent market size, both by number of individuals and the value of their liquid assets.
  • The affluent population grew by 5.3% in 2021 and is expected to grow at an AAGR of 4.8% between 2022 and 2026.
  • The value of liquid assets held by the affluent segment surged by 8.4% in 2021, backed by economic recovery. HNW individuals’ financial wealth grew by 12%, while mass affluent individuals’ wealth grew by 6.0%.
  • The report provides an analysis of factors driving liquid asset growth. It is also split into asset classes - equities, mutual funds, deposits, and bonds.
  • The affluent population are more risk-tolerant and invest a significant proportion of their investments in risky assets such as equities, compared to emerging affluent and mass market individuals.
The report also provides data and insights on the size of offshore holding of HNW investors in the APAC region.
by GlobalData
Enter your details here to receive your free Report.

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