Singapore Exchange snaps up Scientific Beta

Singapore Exchange (SGX) is to acquire a 93% stake in smart beta index provider Scientific Beta, it was announced today.

The acquisition, which is to cost SGX €186m in cash, subject to closing adjustments, will boost the exchange’s data, connectivity and indices business, it said in a statement.

Also headquartered in Singapore, Scientific Beta was established by an affiliate of EDHEC Business School in 2013 to provide asset owners and asset managers with factor indices and strategies.

The Singapore Holding of the EDHEC endowment fund – established by the EDHEC Business School and its alumni – will retain a 7% stake in Scientific Beta and a seat on the index provider’s board, remaining “a strategic partner of SGX in growing the company after the transaction,” according to the statement.

Noël Amenc, chief executive officer of Scientific Beta, said: “As Asia’s most international exchange and a global leader, SGX provides a strong platform for Scientific Beta to expand regionally and across client segments.”

Loh Boon Chye, CEO of SGX, said: “Scientific Beta brings a highly regarded research pedigree in the rapidly growing smart beta space, along with a strong suite of high profile clients in the US and Europe.

“Besides being complementary to our existing SGX Index Edge thematic and custom index capabilities, we also see new product opportunities based on Scientific Beta’s indices.”

As at 30 September, some $55bn (€50bn) in assets from more than 60 asset owners and asset managers replicated Scientific Beta indices, up more than 10 times the amount four years ago.