Refinitiv Adds to Buy-Side Offering with AlphaDesk Acquisition

Refinitiv has announced that it is acquiring buy-side order management system (OMS) provider AlphaDesk. The deal, which was announced on May 23 for an undisclosed amount, adds a key link that was missing from Refinitiv’s buy-side supply chain.

“At the core of this acquisition is the objective to continue to build a world-class, end-to-end workflow solution that enables our clients to move from pre-trade activities to trade execution to risk and portfolio management across asset classes on an integrated platform,” Paul Palackel, director of workflow solutions at Refinitiv, tells WatersTechnology.

Refinitiv already offers important elements of the trade lifecycle—such as pre-trade data and analytics—through the Eikon platform, which includes execution management system REDI. Many firms, according to the vendor, also use Refinitiv’s Elektron middleware infrastructure and route REDI through its Autex network.

To this, AlphaDesk adds a multi-asset class and multi-currency OMS platform, combining order and operations management capabilities, Refinitiv said in a statement.

The acquisition isn’t wholly surprising. The two companies partnered prior to the acquisition, having jointly sold to more than 20 buy-side customers “a more holistic end-to-end proposition of AlphaDesk OMS, REDI EMS and Eikon,” says Palackel.

A Shrinking Field

The deal will help to bring Refinitiv up to speed with arch-rival Bloomberg, says Spencer Mindlin, capital markets technology analyst at Aite Group.

While Refinitiv’s REDI platform has been around a long time and served many different masters, it never had a suite of functionality that looked like an OMS, he says.

“It focused on market data, news and EMS-like functionality, but Refinitiv could never go into a firm and say, ‘You can run your entire business on this product.’”

Refinitiv itself has been through quite a period of transition. Last year, a consortium of financial institutions led by Blackstone Group acquired the Financial & Risk business of Thomson Reuters, renaming the group Refinitiv. As the new entity repositions itself, Mindlin says that the company will have to focus on being an end-to-end provider if it wants to stand out among not only Bloomberg, but other large players that have grown recently through acquisition.

Mindlin believes that the sweet spot for Refinitiv is to attract growing hedge funds and boutique buy-side shops. At a time of great consolidation in the buy-side OMS space, each provider—from Bloomberg to State Street to BlackRock to SS&C—is trying to find their niche.

“Refinitiv are thinking about trying to attract customers who are thinking about Bloomberg’s suite as a solution,” he says. “Bloomberg has all these things; it has the OMS and the EMS, it has the routing network and of course Bloomberg has a wealth of data and reference information. A big gap in Refinitiv’s portfolio was the OMS, and now that gap has been plugged with the purchase of AlphaDesk.”

Refinitiv expects the acquisition to close in the second quarter.