Deutsche Börse to merge SimCorp and Axioma, shuttering Qontigo

Speaking at Deutsche Börse’s Investor Day, held on November 7, CEO Theodor Weimer announced that the integration of Danish trading tech vendor SimCorp into the business was complete, and that it would be merging with Axioma, a subsidiary of the exchange since 2019 and partner of SimCorp since 2021. Axioma currently provides factor risk models, portfolio construction tools, and multi-asset class enterprise risk solutions to buy-side clients.

Deutsche Börse’s acquisition of SimCorp in May marked a bid to join the ranks of other tech-forward exchanges like Nasdaq and the London Stock Exchange Group. At the time, a head of buy side at an enterprise data management provider told WatersTechnology that SimCorp was the “last independent, front-office, back-office service provider left,” and likened it to BlackRock’s flagship investment platform, Aladdin.

The move for SimCorp also came as a result of Deutsche Börse’s sharpening its focus on the buy side. While the exchange already possessed a data and analytics segment comprised of analytics firm Qontigo and ESG data provider ISS, it lacked a front-to-back portfolio management company to complete its planned transition of these internal services into an investment management solutions group. Until recently, that is.

Forecasting no major moves in terms of M&A for 2024, Weimer declared that as a result of its 2023 activity, the exchange has become “structurally attractive for the buy side”, showing that across Axioma, SimCorp, ISS and Eurex, Deutsche Börse now has access to more than 3,000 asset managers and asset owners, globally.

Originally, the exchange had intended to include Qontigo in a planned merger with ISS, and when queried on this change in the Q&A portion of the day, Deutsche Börse board member Stephan Leithner explained that the plan changed once executives had taken stock of its position.

“For us, the gameplan was—from the outset—to build on SimCorp’s past,” he said. “With the 100% ownership of SimCorp we have a different outcome, and many of the content synergies between Axioma and the market have already been formed. But they don’t involve being housed together [with STOXX],” which will continue forward as a separate offering.

Qontigo ceases to exist, as its two components, Axioma and STOXX, are evolving into two separate value propositions under Deutsche Börse Group’s newly unveiled Horizon 2026 strategy. The newly created Investment Management Solutions segment sees the integration of ISS and STOXX, to deliver index solutions. Simultaneously, Axioma will merge into SimCorp to form a front-to-back investment management platform.

Regarding partners, Weimer announced that the exchange’s existing partnership with Google Cloud would continue as Deutsche Börse migrates the rest of its IT infrastructure to the cloud.

“We already have 40% of our IT state in the cloud, and by 2026 it will be around 70% with Google Cloud as a preferred partner,” Weimer says. “We benefit from Google Cloud’s skills and their superior knowledge in the industry. Areas where we can expect tangible results from our Google Cloud partnership include faster time to market, increasing efficiency and superior cybersecurity.”

Editor’s note: An earlier version of this article stated that Qontigo would remain a separate entity from Deutsche Borse’s SimCorp and other subsidiaries. Instead, the Qontigo brand will cease entirely.