Deutsche Börse's has launched a new subsidiary comprised of Stoxx, Dax and Axioma covering indices and risk analytics.
Deutsche Börse Group has expanded its offering with the launch of a newly created company, aimed at leading the modernisation of investment management from risk to return. The new specialist outfit, Qontigo combines Deutsche Börse's index business (Stoxx and Dax) and Axioma's portfolio-construction and risk analytics suite.
The new company responds to the exchange’s strategy around the passive investing and smart beta growth story of which structured products remain an essential part.
“[This is a] growth story certainly, associated with the rise of the smart beta but in a different category from passive investing,” said Roberto Lazzarotto (pictured), global head of sales and marketing at Stoxx, adding, “Qontigo will help us increase your footprint in the structured products market”.
“Qontigo is the association of the best of the analytics from Axioma with the strength and expertise in indexing of Stoxx. It translates into more innovation and agility to help our clients fulfil their ambitions in the structured products segment with differentiated strategies.”
According to Lazzarotto, Qontigo is “uniquely equipped to address trends that are reshaping investment management”. These include the growth of passive investing and smart beta, the modernisation of the investment management technology infrastructure to achieve efficiency and scale, and the transition towards customisation of investment solutions.
Stoxx’s Eurostoxx50 and the Dax are two of the most utilised underlyings in the structured products market globally, and the German exchange is looking to capitalise on Axioma’s capabilities so that “new strategies will be created, different asset classes explored [and] broader universes considered”.
“The relationship between Stoxx and Axioma is reflected in strategies such as Stoxx Minimum Variance since 2011 and flourishes in Qontigo,” said Lazzarotto. “We will continue to develop and to deliver the best possible solutions for the structured products market. The structured products market is an important pillar for the index business and will continue to be so.”
The focus of Qontigo is to deliver industry-leading investment intelligence and analytics “to meet the growing demand for increasingly sophisticated solutions and a platform for future growth” in line with the exchange’s Roadmap 2020 strategy which builds on three pillars including organic growth, programmatic M&A and new technologies.
As part of the transaction, Deutsche Börse has entered into a strategic partnership with General Atlantic, a leading global growth equity investor. General Atlantic invested approximately US$720mn in Qontigo, which was used to partly finance the acquisition of Axioma. Deutsche Börse's index business (Stoxx and Dax) was valued at €2.6 billion (US$2.8 billion) and Axioma at US$850m in this transaction.
Qontigo is headquartered in Frankfurt, with other locations including New York, Zug and London.