Two new institutional investment industry deals have been announced in recent days, with EthiFinance and ESG Book revealing their merger and STOXX reporting the acquisition of Scientific Beta.
The aim of the merger of EthiFinance and ESG Book is to create a new, European credit and sustainability ratings agency “champion”.
“Coming days after the implementation of ESMA’s new sustainability ratings regulations, the transaction creates the only independent European provider operating at scale across both sustainability ratings, credit ratings, data and analytics in a highly fragmented global market estimated to be worth up to $10bn,” the two entities said in a joint statement.
Applicable since 2 July, the ESMA ESG ratings regulation introduces the first EU-wide regulatory framework for ESG ratings providers. Requirements for EU-based providers include applying for authorisation and making their rating methodologies publicly available.
Formerly Arabesque S-Ray, ESG Book is a sustainability data and technology company founded by Arabesque and a coalition of financial institutions and organisations including the International Finance Corporation and the Principles for Responsible Invesment.
EthiFinance was founded in 2004 in Paris and is a sustainable finance-oriented credit and sustainability rating agency fully committed to sustainable finance.
The new, combined entity is due to operate under the EthiFinance brand.
Asset owner expansion from Scientific Beta deal
Separately, STOXX, the benchmark and custom index solutions provider, yesterday announced its acquisition of Scientific Beta, the EDHEC-Risk Institute spin-out that was initially sold to the Singapore Exchange (SGX).
In a statement, STOXX said the addition of Scientific Beta was expected to accelerate its expansion within the asset owner segment and deepen engagement with large institutional investors. Its wide-ranging capabilities further strengthen STOXX’s ability to deliver customised, research-led portfolio solutions and to embed its benchmarks more deeply within institutional mandates.
“Asset owners are increasingly seeking strategies that combine academic rigour with real-world implementation at scale,” said Axel Lomholt, STOXX general manager.
“Bringing Scientific Beta into STOXX strengthens our ability to meet this demand, offering clients seamless access to advanced factor research, robust portfolio construction, and scalable index implementation within a single, integrated platform.”
