Markit

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For the villages in Iran, see Markit, Iran.
Markit Ltd.
Type Public
Traded as NASDAQMRKT
Industry Financial services
Founded 2003
Headquarters London, United Kingdom
Number of locations 20 offices
Area served Worldwide
Key people Lance Uggla, CEO
Products Financial information
Financial processing
Financial services
Financial solutions
Market data vendor
Revenue Increase US$ $947.9 million [1]
Employees 3,200 (October 2013)
Divisions Information
Processing
Solutions
Website www.markit.com

Markit Ltd. is a global, financial information and services company with over 3,200 employees,[2] founded in 2003 as independent source of credit derivative pricing.[3] The company provides independent data, trade processing of derivatives, foreign exchange and loans, customised technology platforms and managed services. The company aims to enhance transparency, reduce financial risk and improve operational efficiency. Its client base includes institutional participants in the financial marketplace.[2]

Background[edit]

Markit was founded in 2003 by Canadian Lance Uggla[4][5] in St Albans, outside London, as Mark-it Partners to provide daily credit default swap (CDS) pricing.[6]

Markit's credit derivative data sales rose during the subprime mortgage crisis in 2007 and later years.[7]

In September 2009 Markit and Depository Trust & Clearing Corporation (DTCC) launched MarkitSERV, a joint venture to provide over-the-counter (OTC) derivative trade processing.[8]

On May 5, 2014, Markit Ltd., a company registered in Bermuda, filed for an Initial Public Offering (IPO), to be listed on the NASDAQ Global Select Market under the symbol MRKT.[1][9] The stock began trading on June 19, 2014 with an initial pricing of $24 per share.[10]

Company performance[edit]

By 2009 Markit had "1,000 institutions as clients - including investment banks, hedge funds, asset managers, central banks, regulators, rating agencies, and insurance companies."[3]

In 2012, the company had annual revenues of USD860 million, with 3000 employees. In 2012, Markit had a $5 billion valuation.[4]

By 2013 Markit served 3,000 institutions across the financial markets which include investment banks, hedge funds, asset managers, central banks, regulators, auditors, fund administrators and insurance companies.[2]

Acquisitions[edit]

LoanX, Inc., a US provider of syndicated loan data, was acquired by Markit in December 2003.[11]

Totem Valuations, a supplier of consensus valuations and month-end data, was bought by Markit in May 2004[12]

Communicator Inc, White Plains, New York based financial information technology company, was acquired by Markit in May 2006 .[13]

Chasen Enterprises, provider of structured securities modelling was acquired by Markit in August 2006.[14]

MarketXS, Amsterdam based financial data distribution and trading services provider was bought by Markit in September 2006[15]

The International Index Company (IIC) and CDS Index Company (CDSIndexCo), owners of the iTraxx and CDX credit default swap indexes, were acquired by Markit in November 2007[16]

SwapsWire's acquisition by Markit announced In December 2007.,[17] which was completed in May 2008.[18]

The BOAT, Markets in Financial Instruments Directive-compliant trade reporting platform acquired by Markit from a consortium of nine investment banks In January 2008. The BOAT was owned by consortium of nine investment banksABN Amro, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Merrill Lynch, Morgan Stanley and UBS who had launched the system in September 2006.(Finextra 2008)[19] The Boat platform was established by these nine banks "for the collection and sale of trading data following the introduction of EU's Markets in Financial Instruments Directive (MiFID) in November 2007.

NTC Economics, a provider of global macro-economic indicators and owner of the widely-referenced Purchasing Managers Index (PMI) series.,[20] bought by Markit in April 2008.

JPMorgan Chase's FCS Corporation, a provider of syndicated loan market portfolio and risk management software and services, including the Wall Street Office family of products, was acquired by Markit in July 2008.[21][22]

Fidelity Information Services's ClearPar, an electronic loan-trade-processing platform, was acquired by Markit in October 2009 which helped Markit to work with DTCC to improve the processing of syndicated loans.[23]

Wall Street on Demand (WSOD), Boulder, Colorado based company, which provides financial data visualization services acquired by Markit in June 2010.[24][25]

QuIC Financial Technologies, Inc (QuIC)., risk analytics firm, was acquired by Markit in January 2011. QuIC provides financial organisations with risk analytics services to test market and credit risk tolerance in financial portfolios and simulate risk at the enterprise level.[26]

Data Explorers, a provider of securities lending data bought by Markit in April 2012.[27]

Cadis, an enterprise data management specialist, was acquired by Markit in May 2012.[28]

On April 2, 2013, Markit acquired the remaining interest in joint venture MarkitSERV from DTCC.[1]

Index products[edit]

On 17 January 2006, CDS Indexco and Markit launched ABX.HE, a subprime mortgage backed credit derivative index, with planned to extend the index to underlying asset types other than home equity loans.[29][30] In a marketing presentation(2006 Wiley) CDS IndexCo was described as the owner of the DJ CDX family of credit default swap (CDS) indices formed from a merger of the major CDS indices (iBoxx and Trac-X) in April 2004. It introduced a "second generation product such as index tranches and index options."(Wiley 2006)[31] They launched the Home Equity (ABX.HE) ABX on 19 January 2006. Others, such as Credit Cards (ABX.CC), Student Loans (ABX.SL), Auto Loans (ABX.AU) were to be announced in the future. Advertised daily prices were availability on the Markit website. The purpose of the indices is to allow investors to trade exposures to the subprime market without holding the actual asset backed securities. The ABX.HE Index was created from "qualifying deals of 20 of the largest sub-prime home equity ABS shelf programs from the six month period preceding the roll."(Wiley & 2006 11) The market makers of ABX.HE were listed JPMorgan, Goldman Sachs, Deutsche Bank, Barclays Capital, Bank of America, BNP Paribas, Citigroup, Credit Suisse, Lehman Brothers, Merrill Lynch, RBS Greenwich, UBS and Wachovia.(Wiley & 2006 13)

The Loan credit default swap index (LCDX), a loan-only credit default swap index was created in 2007 by CDS Index Company (CDSIndexCo).[32] Forbes journalist described the creation of the index as just-in-time financial engineering. The LCDX provided protection for banks and hedge fund clients from the overly leveraged loan market.(2007 Lenzer)[32]

Sixteen major financial institutions, JPMorgan, Goldman Sachs, Deutsche Bank, Barclays Capital, Bank of America, BNP Paribas, Citigroup, Credit Suisse, Lehman Brothers, Merrill Lynch, RBS Greenwich, UBS and Wachovia,[32] owned the private company called the CDS Index Company (CDS IndexCo), that developed the ABX index on 17 January 2006. Markit Group Limited marketed the ABX index and by 2007 had acquired (CDS IndexCo). On 17 The ABX index was a credit default swap of asset-backed mortgages of 30 of the most liquid mortgage-backed bonds. Hedge funds began shorting that ABX index in early 2006 at par. The Deutsche Bank, alone, reportedly made $250 million.(2007 Lenzer)[32]

Atlanta-based IntercontinentalExchange (NYSE: ICE), a derivatives exchange and clearing house operator, announced four credit index futures contracts, based on the Markit CDX and Markit iTraxx indices—Markit CDX NA IG, Markit CDX NA HY, Markit iTraxx Europe (Main), and Markit iTraxx Crossover, would start in May 2013. The contracts were subject to review by the Commodity Futures Trading Commission.[33]

Management and Employees[edit]

Markit had 150 employees in 2003, and by the end of 2013 had around 3200 employees across the Globe.[5]

Management per May 2014:[1]

Name Function
Lance Uggla founder and Chief Executive Officer
Kevin Gould co-founder and President
Jeff Gooch Chief Financial Officer
Adam Kansler Chief Administrative Officer
Shane Akeroyd Global Head of Sales
Stephen Wolf Head of Corporate Strategy

Shareholders[edit]

In 2013, different banks held 51% of Markit shares.
20% of shares is held by Markit employees and executives.
General Atlantic is the biggest independent shareholder with 11% of shares.[34]
Temasek Holdings bought 10% of shares in 2013 for $500 million, thereby valuing the company at $5 bn.[35]

ShareHolders (2013)  % Share[34]
RBS 3.4
Goldman Sachs 5.3
JP Morgan 7.9
Bank of America 8
Temasek 10
General Atlantic 11
Employees 20

Offices[edit]

Markit is headquartered in London and incorporated in Bermuda. Other Markit offices include New York, Dallas, Boulder, Calgary, Vancouver, Toronto, Amsterdam, Frankfurt/Main, Luxembourg, Tokyo, Singapore, Delhi and Sydney.[2][3][36][37]

North America South America Asia Europe Australia Africa

None

None

Divisions, products and services[edit]

Markit organizes itself in three divisions:[1][2]

Division Information Processing Solutions
Products and services
  • Pricing and Reference Data
    • major asset classes
    • Reference Entity Database (“RED”)
    • Bond Reference Data
  • Indices
    • PMI series, iBoxx, iTraxx and CDX
  • Valuation and Trading Services
    • Portfolio Valuations
    • Totem
  • MarkitSERV: derivatives
  • MarkitClear: loans
  • Enterprise Software
    • Enterprise Data Management (EDM)
    • Analytics
    • Wall Street Office (WSO)
  • Managed Services
    • Markit On Demand (MOD)
    • Counterparty Manager
revenue % (2013)

48.5%

28.0%

23.5%

Competitors[38][edit]

See also[edit]

References[edit]

  1. ^ a b c d e "Final Prospectus". SEC. 2014-06-20. Retrieved 2014-06-24. 
  2. ^ a b c d e "About Markit". Markit. Retrieved 2013-12-13. 
  3. ^ a b c (PDF) Markit USD Interest Rate Curve XML Specification (Report). Markit. 30 March 2009. http://www.cdsmodel.com/assets/cds-model/docs/Interest%20Rate%20XML%20v1.3.pdf.
  4. ^ a b "Plumbers in suits". The Economist. 2013-07-06. 
  5. ^ a b Companies House information
  6. ^ Harrison, Natalie (2007-11-14). "Markit says buys IIC, agrees to buy CDS IndexCo". Reuters. Retrieved 2007-12-14. 
  7. ^ Baird, Jane (2007-11-23). "Global investors struggle to value credit assets". Financial Post. Retrieved 2007-12-16. 
  8. ^ "Markit and DTCC launch OTC derivatives trade processing JV". FinExtra.com. 2009-09-01. Retrieved 2009-10-30. 
  9. ^ Alden, William (2014-05-05). "Financial Data Company Markit Files for I.P.O.". The New York Times. Retrieved 2014-05-05. 
  10. ^ "Markit IPO jumps after selling shares". USA Today. 2014-06-19. 
  11. ^ "Mark-It Partners' acquisition of LoanX creates unrivalled coverage of the global credit markets". Bobsbuide. 2003-12-16. Retrieved 2010-10-10. 
  12. ^ "Mark-It Partners acquires Totem Valuations". Finextra. 2004-05-05. Retrieved 2010-10-10. 
  13. ^ "Markit Acquires Communicator". Communicator Inc. 2006-05-10. Retrieved 2007-12-16. 
  14. ^ "Markit Reinforces Structured Finance Services Through Acquisition of Chasen Enterprises". PR Newswire. 2006-08-29. Retrieved 2007-12-16. 
  15. ^ "Markit acquires MarketXS to meet client demand for bespoke delivery of data and MiFID compliance solutions". Bobsguide. 2006-09-04. Archived from the original on 2007-09-05. Retrieved 2007-12-16. 
  16. ^ "Markit Buying Owners of iTraxx, CDX Credit Indexes". Bloomberg. 2007-11-14. Retrieved 2007-12-14. 
  17. ^ "Markit to buy SwapsWire". Finextra.com. 2007-12-04. Retrieved 2007-12-14. 
  18. ^ "Markit Completes Acquisition of SwapsWire". BobsGuide. 2008-05-27. Retrieved 2008-07-07. 
  19. ^ Finextra (22 January 2008). "Markit buys Boat". Finextra Research. Retrieved 4 February 2008. 
  20. ^ "Markit acquires NTC Economics". Bobsguide. 2008-04-10. Retrieved 2009-10-30. 
  21. ^ Dave Valiante (2008-07-28). "JPMorgan’s FCS Corporation Acquired By Markit". Wall Street & Technology. Retrieved 2008-09-21. 
  22. ^ "Markit Completes Acquisition of FCS from J.P. Morgan". Bobsguide. 2008-09-04. Retrieved 2008-09-21. 
  23. ^ Michael Aneiro (2009-10-30). "Markit To Acquire Electronic Loan-Trading Platform ClearPar". The Wall Street Journal. Retrieved 2009-10-30. [dead link]
  24. ^ "Financial Data Visualizer WSOD Acquired By Markit". paidcontent.co.uk. 2010-06-09. Retrieved 2010-07-19. 
  25. ^ "Markit Completes Acquisition of Wall Street On Demand". Markit. 2010-07-08. Retrieved 2010-07-19. 
  26. ^ "Markit Acquires Risk Analytics Firm". Markit. 2011-01-12. Retrieved 2011-02-21. 
  27. ^ "Markit Acquires Securities Lending Analytics Specialist Data Explorers". Markit. 2012-04-02. Retrieved 2012-04-02. 
  28. ^ "Markit to Acquire Enterprise Data Management Specialist Cadis". Markit. 2012-05-09. Retrieved 2012-05-09. 
  29. ^ "CDS Indexco and Markit Launch Synthetic ABS Index". Markit. 2006-01-17. Retrieved 2007-12-14. 
  30. ^ "Markit launched ABX.HE". 17 January 2006. 
  31. ^ "ABX Indices The New US Asset Backed Credit Default Swap Benchmark Indices" (PDF). Wiley. January 2006. 
  32. ^ a b c d Lenzner, Robert (8 August 2007). "Profiting From The Meltdown". Forbes. Some top banks are quietly indexing credit, avoiding the credit bubble and raking in big bucks. 
  33. ^ "IntercontinentalExchange (ICE) announced the launch of credit index futures contracts". Press Release Newswire. New York: IntercontinentalExchange (ICE). 11 March 2013. 
  34. ^ a b "Banks cut holdings in Markit". eFinancialNews. 2013-10-16. 
  35. ^ "Temasek stake in Markit values data company at $5bn". Financial Times. 2013-05-21. 
  36. ^ "Markit Opens Delhi Office". Markit. 2009-09-03. Retrieved 2010-02-20. 
  37. ^ "Markit Careers Sydney". Markit. 18 August 2010. Retrieved 18 August 2010. 
  38. ^ "Markit looks at web-based one-stop shop". Financial Times. 2012-09-10. 

External links[edit]