Exclusive: Barclays weighs index unit sale after MSCI approach - sources

Tue Nov 19, 2013 2:18pm EST
 
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By Jessica Toonkel and Soyoung Kim

NEW YORK (Reuters) - Barclays Plc (BARC.L: Quote) is exploring options for its index business after equity index provider MSCI Inc (MSCI.N: Quote) approached the British bank recently about buying the unit, according to several people familiar with the situation.

MSCI's interest has spurred early-stage discussions at Barclays, the sources said, and the bank has not yet decided whether it should sell the Barclays Indices platform, which includes well-known products like the Barclays U.S. Aggregate Bond Index, which tracks assets with a market value of $16.7 trillion.

All of the sources wished to remain anonymous because they were not permitted to speak to the media.

It could not be determined how much Barclays would get for the unit or how much MSCI offered.

Barclays declined to comment. An MSCI spokeswoman did not have an immediate comment.

Barclays lists 88 major indexes on its website, but the bank offers thousands of benchmarks and indexes, many of which were created for clients.

Almost $2.3 trillion in exchange-traded products and mutual funds track Barclays indexes, making it the second-biggest provider after Standard & Poor's, according to Lipper. That does not include other pools of assets that track the indexes, like institutional separate accounts and collective trusts.

The U.S. Aggregate Bond Index, which Barclays bought as part of the Lehman Brothers acquisition during the financial crisis, is among the platform's best-known offerings. With investors pouring money into fixed-income, passively managed exchange-traded funds (ETFs) and mutual funds, Barclays could get a good premium if it decides to sell the business, according to industry experts.   Continued...

 
A logo hangs outside a branch of Barclays bank in London July 30, 2013. REUTERS/Toby Melville