HomeBusinessMoneyLondon Stock Exchange to buy ex director Stephen O'Connor's risk firm

London Stock Exchange to buy ex director Stephen O’Connor’s risk firm

London Stock Exchange to buy risk management firm founded by former director for £274m

Ex-Morgan Stanley banker Stephen O’Connor is selling risk management service Quantile  to the London Stock Exchange

A former director of the London Stock Exchange Group will cash in when it buys the company he founded for £274million. Ex-Morgan Stanley banker Stephen O’Connor founded risk management service Quantile in 2015.

The 59-year-old owns between 25 per cent and 50 per cent of the firm so will net up to £137million from the LSEG sale, which is set to be completed next year. The sale continues LSEG’s expansion beyond just share trading.

Quantile is a derivative trading tool that helps banks and hedge funds minimise risk. The platform’s two main services are compression, which aims to make trading more efficient, and optimisation, which helps manage risk. 

In its most recent filing on Companies House, Quantile said it made £11.7million in sales in 2020, which was up from £8.6million in 2019. It reported a £4million loss for the year after making £692,000 profit in 2019.

Co-founder O’Connor started his career with a three-year stint as an engineer after a degree in the subject from Imperial College London.  He switched fields to take on an accounting role with big four firm PwC in 1984 where he stayed for four years.

For most of his career – almost 25 years – he worked at investment bank Morgan Stanley where he was a member of the fixed income division’s management committee.

O’Connor has worked with regulators on financial services market reform including as chairman of the International Swaps and Derivatives Association from 2011 to 2014.

He also worked with the Government on a project started in 2010 exploring how computer trading in financial markets would change by 2022. 

The City veteran was a non-executive director on LSEG’s board from 2013 until August this year and remains on the board of the London Stock Exchange, part of LSEG.

After the sale Quantile will sit as a company in LSEG’s post-trade division, which aims to help investors cut risk and increase efficiency. 

The head of the post-trade division Daniel Maguire said the purchase builds on its ‘strong growth’.

O’Connor’s co-founder and Quantile chief executive Andrew Williams said the companies have ‘many of the same values’ and he was ‘delighted’ with the agreement. He said: ‘I look forward to working with Daniel and the team.’

LSEG bought data provider Refinitiv in 2019 for £22billion in an attempt to capitalise on increasingly lucrative data services and rival Bloomberg as a provider. 

It was praised at the time but the cost of integrating Refinitiv into LSEG has spooked investors and shares in the group have fallen 26.75 per cent this year.

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