Markit, a financial information provider best known for its CDS data, announced the acquisition of Data Explorers, a provider of securities lending data, from mid-market private equity firm Bowmark Capital. Terms were not disclosed.
Data Explorers provides benchmarking information to securities lenders and short sale data to asset managers. It covers the $12 trillion of securities lending market involving 20,000 institutional funds. Its database is said to include $2 trillion of loan balances on average covering 30,000 equities, 40,000 corporate bonds and 80,000 government bonds.
According to a survey published by the Financial Times in February 2012, Data Explorers’ annual sales through June 2011 were £21.4 million (US$ 34.2 million) with profits of £7 million (US$11.3 million). The firm employs around 100 staff. Data Explorers has recently expanded its US operations, opening a New York office and doubling the size of its team in North America.
The firm was established in 2002 and sold a 51% ownership to Bowmark Capital in 2007. Since 2007, sales and profits have grown at a compound annual rate of 30% and 40% respectively, with staff increasing from 35 to 100 over the period.
Data Explorers has partnered with market data vendors to redistribute its data. Thomson Reuters distributes Data Explorers’ short-sale data to investor relations professionals. Factset, Bloomberg and Capital IQ have each incorporated Data Explorers data into their platforms.
Data Explorers first started working with Markit on the development of a securities lending index. Launched in 2009, the Markit Data Explorers U.S. Sector Sentiment Index reflects sector-level investor sentiment derived from securities lending and short-selling information.
Markit acquired Quantitative Services Group (QSG), an independent research providing equity research and trading analytics, in November 2011.