The London Stock Exchange (LSEG) has agreed to acquire credit data provider Octus in a cash deal worth $3.535bn.
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The acquisition, the exchange's biggest since its purchase of data provider Refinitiv in 2019 for $27bn, will see LSEG expand its presence in the credit and private market data market - one of the fastest growing areas in investment banking and asset management.
Investors are increasingly looking to private markets in search of higher returns and greater diversification. However, the data and workflow processes in these unlisted markets can be complex and costly while traditional fund structures do not always account for the complexities of private market assets.
Consequently, a market is developing for so-called hybrid funds that combine the properties of traditional funds and investment vehicles with both listed and unlisted assets.
This has led exchanges and other execution venues to look at expanding their capabilities in private market asset classes.
According to LSEG, the combination of Octus' private market capabilities with LSEG's fixed income data, analytics and distribution means its customers will benefit from "integrated solutions and intelligence across public and private credit" and will be able to "source deals, assess risk and manage their portfolios through LSEG’s platform".
LSEG has also been under pressure from investors to expand its portfolio, most notably from activist investor Elliot.
US-based Octus was launched in 2013 by Kent Collier. In 2026, it is expected to generate more than $300m in revenue. The company, formerly known as Reorg, was acquired by UK private equity group Permira in 2022 at a valuation of about $1.3bn.