The London Stock Exchange Group is eyeing a $3.5bn (£2.6bn) deal for a private market data business as it pushes further into shadow banking.
The owner of the UK’s main stock exchange said it was in discussions to acquire Octus, a US financial data group that has grown rapidly in concert with the expansion of private markets. It provides information about private credit, leveraged finance and bankruptcy markets.
Octus is owned by Permira, and the UK-based private equity group would make a considerable return on the $1.3bn (£980m) it paid for a controlling stake in 2022 if the talks were to yield a deal.
London Stock Exchange Group (LSEG) said that the acquisition would be “immediately accretive” to the company’s data and analytics business and would grow its revenue. Shares in LSEG were down by around 5pc by late on Tuesday.
The market for information on private credit, known as “shadow banking”, has ballooned along with the industry itself.
According to McKinsey, the broader private capital sector has risen from $14tn in 2020 to $24tn today, with private credit funds estimated to manage more than $2.5tn of that.
In recent years, LSEG has moved towards data and analytics and away from its bread-and-butter role running London’s stock and bond markets.
It made a significant push into big data in 2019 by acquiring Refinitiv, the financial information and terminal business, for $27bn (£19.8bn).