London Stock Exchange Group

What does the company do?

With a market capitalisation of approximately £46bn, London Stock Exchange Group was purchased for the portfolio during the year. With the acquisition of Refinitiv in 2021 the company has continued its transformation from a traditional exchange towards being a global financial markets infrastructure and data provider. Approximately 70% of revenues now come from providing Data & Analytics services, exposing the group to the structural growth in demand for financial data. A similar portion of group revenues are recurring, subscription-based in nature which provides resilience. We see some areas of the business, for example the clearing house LCH, as having very high barriers to entry. The cash generative nature of the group means that the balance sheet has strengthened quickly following the Refinitiv acquisition. We think that accelerating revenue growth and delivery of revenue and cost synergies will lead to the company being valued as a leading information services company with clear quality characteristics.