Activist hedge fund Elliott Management has privately assured the UK government that it is not seeking a break-up of London Stock Exchange Group (LSEG) or a spin-off of the London Stock Exchange, following the build-up of a significant stake in the company, according to a report by the Financial Times.
The report cites unnamed sources familiar with the matter as revealing that Elliott has held discussions with government officials to allay concerns that it might push for structural changes to the group or advocate a move to a US listing, where rival exchanges often command higher valuation multiples. The hedge fund is understood to have stressed that its engagement is focused on improving performance rather than dismantling the business.
The move comes after Elliott disclosed a position in LSEG earlier this month, prompting scrutiny from policymakers given the exchange’s central role in UK capital markets. Shares in LSEG have fallen around 31% over the past year, and Elliott is believed to be pressing for measures including additional share buybacks.
Elliott founder Paul Singer is said to have proactively reached out to officials, a step viewed as an effort to acknowledge LSEG’s national importance. The UK Treasury, which has prioritised revitalising domestic capital markets, is understood to be closely monitoring the situation, although it declined to comment.
LSEG chief executive David Schwimmer is expected to address the group’s engagement with Elliott when the company reports annual results, alongside investor concerns over the impact of artificial intelligence on its data-driven business model.
Through its 2019 acquisition of Refinitiv, LSEG has transformed into a global financial data provider, with equities accounting for a small proportion of revenues.
