SimCorp is to merge with Axioma, a global provider of factor risk models, portfolio construction tools, and multi asset class enterprise risk solutions, as Deutsche Börse looks to roll out its Investment Management Solutions (IMS) segment. SimCorp CEO Christian Kromann spoke exclusively to BEST EXECUTION on how the merger will benefit clients and how it reflects a wider strategy at parent firm Deutsche Börse.
The merger reflects Deutsche Börse’s intention to establish its Investment Management Solutions (IMS) segment. the prior Deutsche Börse Group acquisition of SimCorp initiated the formation of a new IMS segment, with SimCorp/Axioma on one hand, and ISS/STOXX on other hand. These two pillars form the IMS segment of Deutsche Börse Group. As a result of the two mergers, Qontigo will cease to exist as a brand or business.
SimCorp is now initiating a post-merger integration process. This process will run over the remainder of 2023 and into 2024.
SimCorp CEO Christian Kromann told BEST EXECUTION: “Merging with Axioma, which has already been a strategic SimCorp partner, creates an even more powerful proposition for clients, with a full front-to-back-offering combining existing SimCorp front-office, middle-office, and back-office capabilities Axioma’s risk management, and portfolio construction and optimization tools.”
“From a product perspective, extending the partnership to a full integration enables a more interconnected experience for clients, allows for enhanced future development and unlocks potential to create stronger front-office capabilities as a combined team. From a commercial perspective, it bolsters the front office domain expertise of SimCorp. For Axioma, the merger expands the addressable market beyond risk managers and heads of desk to deploying as an enterprise risk tool,” Kromann added.
“With the announcement of the merger, we are initiating an integration period, where we will look at how we can integrate the SimCorp and Axioma organizations in the best way to serve clients, partners and employees alike, whilst maintaining Axioma as a standalone brand and offering to protect go-to-market capabilities.”
Kromann said: “The merger will be positive for clients. First, clients will have the option of using a market leading optimizer and risk platform integrated with SimCorp and can leverage the benefits of the joint roadmap we build together. Furthermore, the merger simplifies vendor risk, improves the end user experience and allows for a quicker time to value in implementation now that we are one company.”
The SimCorp deal could be seen as further evidence that Deutsche Borse is moving in a similar direction as London Stock Exchange Group (LSEG) i.e. towards data and technology, in contrast with other market players such as Euronext, which is making a play for post-trade with clearing and services instead. The move to greener pastures has been set in motion by the squeeze on exchanges’ primary business by secondary exchanges and the exodus of liquidity from Europe to the US.
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