Markit, the London-based global financial information services provider, announced the acquisition of Data Explorers, a company that specializes in global securities lending data and short sales activity. Financial details on the transaction were not disclosed.
Markit acquired the company from Bowmark Capital, a mid-market private equity firm that had owned Data Explorers for the past four years.
[For more on recent developments at Data Explorers.]
Data Explorer’s database covers $12 trillion of securities made available for lending by 20,000 institutional funds, including pension funds and insurance companies, which are then borrowed by prime brokers and hedge funds. The data is used by custodians, agent lenders, prime brokers and asset managers to inform their investment decisions, manage risk and produce independent benchmarks, stated the release.
In addition, the company provides a comprehensive view of short sale interest and institutional activity across market sectors. Since hedge funds need to borrow the stock before they can short it, securities lending is a good proxy for stock selling activity.
In a previous interview about the firm’s new iPad application for securities financing professionals, Data Explorer’s CEO Donal Smith said, “The market is over the counter, it’s off-exchange. So we provide a valuable degree of transparency."
According to a Markit spokesman, the acquisition is relevant to Markit’s equities data and analytics business. “We have an existing equities data business and we think this is a great complement to that,” said a spokesman for Markit. While Data Explorers will continue to grow its business, “We are going to do new things with that data set and technologies they have, according to the spokesman, who characterized the acquisition as equity oriented.
Last December, Markit acquired QSG, a firm that provides equity-factor analysis.
In the release, Markit indicated it plans to develop products for equity markets participants in the ETF, dividend forecasting and quantitative research areas to complement its existing services.
“Data Explorers is now the leading provider of data and analytics to the entire securities finance market from agent lenders through to hedge funds and our services are a great fit with those offered by Markit,” commented Smith in today's release. Data Explorers was founded in 2002 and has offices in New York, London, Edinburgh and Hong Kong.