Barclays offloads risk analytics and index business to Bloomberg for US$790m

Bloomberg has entered into an agreement to buy Barclays Risk Analytics and Index Solutions (Brais) for approximately US$790m (£520m), with completion expected by mid-2016.. The bank's division in charge of benchmark and strategy indices, portfolio analytics, risk and attribution models, and portfolio construction tools span global markets covering multiple asset classes, most notably the Barclays Family of Aggregate Bond Indices.

The bank will retain the Roubini Barclays Country Insights Indices, a family of tradeable equity indices based on the Roubini Country Insights model launched in July 2014, and the Shiller Barclays CAPE indices, developed jointly by Barclays and Professor Robert Shiller of Yale University, which fall under the bank’s investment strategy index business headed by Fabien Labouret, global head of EFS investment strategies at Barclays, said a Barclays’ spokesperson.

The UK bank will also keep its quantitative investment strategy index business, the calculation and maintenance of which will be done by Bloomberg. The sale makes part of the bank's strategic review that saw its equity derivatives/structured products investor solutions division restructured, and a new equities and funds structured (EFS) markets unit launched this summer.

There are over 500 structured products featuring Barclays' indices of which 199 are live products, according to the SRP database. The most popular Barclays indices in the retail structured products market include its Aggregate Bond Index, which is featured in 35 products, the 20+ Year US Treasury, which appears in 22 products, and the Black Chips Price Return USD Index, which has been deployed in 20 structured products in South Africa.

The acquisition will enable "innovation around better creation, sharing, publishing and benchmarking tools, as well as portfolio and risk analytics", said Jean-Paul Zammitt (pictured), global head of financial products at Bloomberg.

The US company owns a commodity index, also known as BCOM (formerly the UBS-Dow Jones Commodities Index, which was acquired in 2014), as well as the AusBond Indices (formerly the UBS Australia Bond Index family). There will be a co-branding arrangement on benchmark indices for an initial term of five years.

Bloomberg has also increased its investment in Port, its multi-asset portfolio risk and analytics tool, and is seeking to expand in this area with the acquisition of the intellectual property in Point, Barclays' equivalent, which will operate Point for 18 months post completion in order to help clients transition to Port.

Barclays has offloaded a number of non-core business units as it implements the strategic review announced by Antony Jenkins, former chief executive. In September, the bank announced the closure of its Bmarkets platform, which followed the sale to CaixaBank (formerly La Caixa) of its retail banking, wealth and investment management and corporate banking in Spain, as well as its Portugal-based non-core assets to Spain's Bankinter.