Jan 10, 2023
TMX hopes to do more merger and acquisition deals after VettaFi investment: COO
VettaFi is a partnership and investment to accelerate our ETF journey: TMX COO
TMX Group Limited’s investment in VettaFi Holdings LLC is only the start of their information services mergers and acquisitions journey, according to TMX Chief Operating Officer Jay Rajarathinam.
“We hope to be doing more of these acquisitions, partnerships as well as organically building out some of the capabilities, because we have some really unique datasets, really knowledgeable folks and connectivity to our clients… so we hope to be doing more of these and getting more global, more information businesses,” Rajarathinam said in an interview on Tuesday.
On Monday, TMX announced in a press release that it “made a strategic investment” in VettaFi, acquiring around 21 per cent of common equity for about $234 million.
As a result, TMX Chief Executive Officer John McKenzie will be joining the New York-based data analytics platform’s board of directors, according to the release.
Rajarathinam said their investment in VettaFi Holdings LLC will help accelerate their transformation into a more information services business.
“We've been on this journey of becoming more of an information service business, in reaction to what our clients have been demanding, and this is the latest in that journey,” he explained.
He sees this as an opportunity to offer services like index creation and distribution for their client base.
“VettaFi is a very exciting company based in the U.S. that's got some interesting tech capabilities, distribution capabilities, and excellent people who understand the space,” Rajarathinam said.
“So this is a partnership, as well as an investment, to accelerate our journey.”
FOCUS ON PASSIVE INVESTING
Rajarathinam said clients have been showing more interest in passive investing strategies like exchange-traded funds (ETFs).
“This trend and passive investing tools like ETFs, thematics, custom indices, global indices and so on. So having these capabilities not just for the big benchmarks like the TSX, S&P, TSX 60, but also bespoke indices that can be used by ETFs and structured products to track various different exposures, that seems to be the emerging trend,” he explained.
“We want to be there to service our clients and analytics tools, reporting tools, modeling, testing, and distribution capabilities, all those are things that we keep hearing from our clients.”