Introduction:

This case study outlines our role in restructuring market access services for a leading global financial markets infrastructure and data provider that plays a critical role in the world’s financial system.

Focused on supporting their transformative change agenda, our engagement helped them quickly explore the viability of more diverse options to enhance their electronic market access services and infrastructure.

We believe this case study underscores the power of earlier third party engagement in strategic considerations, including driving the higher quality of conversation and outcome that you get when providers and their executives are included in strategic thinking; and (b) are genuinely excited about prospects and have ‘skin in the game.’

The Client's Challenge:

The client was progressing with a significant change agenda that included the continuing integration of a recent acquisition, the transformation of its core trading platform and the consideration of further technology and outsourcing collaborations to de-risk and accelerate those actions.

In support, it had started a strategic review of its existing and recently acquired infrastructure capabilities to more cost-effectively encourage higher electronic trading volumes from its participants.

The challenge was that the teams and incumbent providers were felt to be struggling to consider all options or deliver a sufficiently compelling recommendation for executives or the board.

Our Approach:

Engaged by the client for an independent perspective, we were asked to help quickly broaden and accelerate the team’s consideration of how best to maximise value.

In doing so, we were asked to ensure (a) a full consideration of options spanning divestment, ‘joint venture’ and outsourcing to compare with the preferred option developed by the team to that point; (b) minimal risk and distraction for existing change activities; (c) exploration of options with possible partners started within 2 weeks.

Our key actions included:

• Rapidly designing and facilitating the process

• Managing the resulting actions to consider, shape and negotiate the associated deal or deals

• Conducting a comprehensive evaluation of the existing situation to identify challenges and opportunities

• Working closely with the client's business development, finance, and operational teams to confirm requirements and preferences

• Documenting descriptions and specifications, in the context of commercialisation

• Managing the preparation and oversight of the ‘Indication of Interest’ process and related diligence

• Facilitating early collaborative discussions with potential providers on alternative options to maximise value

• Orchestrating a structured decision-making process with defined criteria aligned with strategic objectives

• Leveraging our expertise to secure favourable deals that maximised value for the client in negotiations

• Evaluating and improving synergies in support of the business case

• Supporting governance consideration, recommendation and board decision

• Strategic sourcing and project management of the decision, selection and all pre-contract actions

The Result:

The outcomes were:

• Two groundbreaking revenue-sharing deals to deliver innovative latency-optimized and proximity-based market access services to augment the client’s existing co-location services and encourage further growth in trading volumes

• Improved market access options, reliability, and quality for the participants

• A significant improvement in EBITDA, facilitated by improved revenues and sizeable cost reduction.

• De-risked implementation with clear responsibilities and incentives for all parties

• Reduced overhead and distraction for the existing change activities and teams

• More compelling options for the board’s decision

Tags:

#FinancialServices #CriticalInfrastructure #Commercialization #RevenueImprovement #CostReduction #Transformation #Sourcing #negotiation