Where the real money is.
One of the core tenets of the sixth paradigm will be the migration of value from transaction execution and (to a lesser extent) processing to data. In this context, Markit Group is in my opinion an excellent example of the kind of company that will emerge and be successful in the coming decade(s):
Markit was founded in 2001 as the first independent source of credit derivative pricing. Today, our data, valuations and trade processing services are regarded as the market standard in the global financial markets, helping our clients to reduce risk and improve operational efficiency.
As a private company with privileged relationships with 16 shareholder banks, Markit has unparalleled access to a valuable dataset spanning credit, equities and the broader OTC derivative universe. Our unique relationships with the bank shareholders give us the opportunity to work closely with these leading market makers to develop innovative solutions for the marketplace.
With close to 1,000 institutions as clients – including investment banks, hedge funds, asset managers, central banks, regulators, rating agencies and insurance companies – we provide round-the-clock support from our offices in London, New York, Chicago, Toronto, Amsterdam, Brussels, Luxembourg, Tokyo and Singapore.
The founders – led by Lance Uggla and Kevin Gould, seasoned capital markets traders and managers both – understood that having good clean, well-packaged data was essential to the growth of any traded market and that this was not a given in (many) OTC markets, picking one in particular – credit – that had great growth potential but particularly poor data availability as a natural starting point for their business. Since then they have grown the business impressively both organically and through judicious acquisitions which focused on bringing their management, distribution and platform strengths to smaller companies focused on certain market niches. I was privileged to serve as a founding Director on their Board (representing DKIB) and so when I saw that they had recently closed on the acquisition of International Index Company (on who’s Board I also served) I must say I was pleased, having first floated the idea of this deal to Lance when I was Chairman of IIC a few years ago. The strategic fit is very good and with Markit’s resources behind it, IIC will be able to continue to improve and strengthen its leading franchise in fixed income indices.
I enjoyed tremendously my time working with Markit and fully expect them to continue to be leaders in the development of modern markets data services in the years to come. They are definitely someone to keep an eye on.
