When Mark Makepeace, founder and former chief executive of FTSE Russell, stepped down from his role at the London Stock Exchange’s index and data business at the start of 2019 he intended to semi-retire.
However, Makepeace soon realised he was not the retirement type. He told Markets Media: “I just thought this is such an interesting time with so much change. Why do I want to sit by a pool drinking cocktails all day ?”
In January 2021 he was named chief executive of Wilshire after the US data, analytics and investment solutions provider, was acquired by a private investor group.
Wilshire was founded in 1972 by Dennis Tito, an aerospace engineer, with just three employees in California and he retired after the sale. The firm now has $1.3 trillion in assets under advisement, including $93bn in assets under management.
After the acquisition Andy Stewart, an industry partner at private equity firm Motive Partners, also joined as chief innovation officer, having previously co-led BlackRock’s alternative investment platform. Jody Kochansky, an industry partner at Motive Partners, also joined as chief technology officer, having formerly served as head of the Aladdin Product Group at BlackRock.
Makepeace continued that Wilshire has always had incredibly bright and capable people, and long-term relationships, but will be going through a modernization process through investing in technology.
“It’s taking an organisation with fingers in many pies, and giving it a single purpose, a single sense of being,” he added. “It is that change and transformation that I enjoy.”
FTSE Russell developed from a start-up to a global player active in more than 70 countries by the time Makepeace left.
He said: “I want Wilshire to have an impact on the industry. The first thing is that you need to have something to say, then you’ve got to develop a voice and that is what we will do at Wilshire.”
Wilshire’s purpose is to help its clients, including institutions, wealth managers and retail platforms, make better investment decisions according to Makepeace.
He believes that a differentiating factor for Wilshire is the investment in technology and the quality of its research.
Makepeace gave the example of the modernization and rebranding of the Wilshire 5000, which had debuted in 1974, and the launch of the FT Wilshire 5000 Index Series in June last year. He said Wilshire introduced a different way of creating a US small-cap benchmark because the existing ones had become dated.
Reza Ghassemieh, chief benchmarking officer of Wilshire, said in a statement: “Investors today want tools that are intuitive, efficient and responsive to the speed of modern markets. Using a percentage-based approach with market segment exposures that expand and contract dynamically, we provide clients with the right building blocks to gain access to a better baseline for passive and active mandates.”
Wilshire is also looking at factor indices. Makepeace said the two factors which have driven performance are value and momentum, but existing indices do not look at these two factors in a clean way.
“I made FTSE the alternative to MSCI,” he said. “I want to make Wilshire and the FT the alternative to both as they need a challenger.”
Digital assets
In September 2021 the Financial Times and Wilshire announced the launch of a series of digital asset indexes developed with CryptoCompare, a cryptocurrency market data provider.
Makepeace said: “We asked what are the white spaces? Where are the gaps and how do we help solve that?”
He explained that Wilshire has created an institutional quality price for digital assets from the fragmented landscape of approximately 180 crypto exchanges.
In December Wilshire announced the formation of a Digital Asset Advisory Group with Blythe Masters, founding partner at Motive Partners as chair. Masters was previously chief executive of Digital Asset, which provides the smart contract language DAML, and a senior executive at J.P. Morgan for 27 years.
The advisory group will also deliver an industry standard Digital Asset Taxonomy System (DATS) as there are many thousands of active digital assets in existence. The firm said DATS is an important building block for the institutional market to categorize, manage and research digital asset technologies by identifying common usage types and underlying technologies, as well as investment themes. The group will hold its first meeting in mid-February.
Growth strategy
Makepeace said Wilshire has had a huge amount of interest in conversations. This year will be about rolling out products and next year will be about increasing use and assets.
The firm has started by launching new indices in digital assets and US equities. Global equities products should be launched by late summer and global bonds by the end of this year.
Another growth opportunity is climate change and environmental, social and governance investing. Makepeace had launched the FTSE4Good ESG index series in 2001.
However, he explained that there has been a lot of assessment of ESG but little measurement of its impact.
“I don’t think we’ve really answered the question about what is the impact for an ESG investor and that is where Wilshire will focus,” said Makepeace. “We’re not here just to create a score.”
