Global funds management firm and index provider, Russell Investments, which has a New Zealand outpost, could soon be in the hands of the London Stock Exchange (LSE).
According to a Bloomberg report published last week, the LSE may pay up to US$3 billion for Russell, which has been shopped around by its current owners for several months.
"LSEG confirms that it is evaluating the merits of a potential transaction involving Russell and is engaged in discussions with the Northwestern Mutual Life Insurance Company, the parent company of Russell," the LSE said in a statement.
It is understood LSE is primarily interested in Russell's indexing business (that includes equity market benchmarks such as the US Russell 2000 Index) rather than its funds management arm. LSE already operates a substantial index business under the FTSE brand but the sector has mushroomed since the GFC reintroduced the notion of risk to investors.
For example, a report by UK-based Create Research found demand for traditional unlisted index funds and the new-fangled exchange-traded funds (ETFs) has grown by about 25 per cent or more since 2009 in both the retail and institutional markets.
