TP ICAP is considering selling off a part of its lucrative data business, including through a public offering.
In its 2023 results, Nicolas Breteau, chief executive of TP ICAP said the firm was exploring options around spinning out Parameta, “whilst retaining ownership of the asset, which include a potential IPO of a minority stake in the business”.
Parameta is a major driver of revenue growth at the broker, up 8% in 2023.
“The demand for high quality over-the-counter financial markets data is growing,” said Breteau. “Global spend on financial market data was $37bn in 2022, and industry players forecast that 2023 growth will exceed historical rates.”
In 2022, shareholders pushed for the sale of Parameta after a lacklustre year and falling share price for the firm in 2021.
Revenue across the entire group was up 3% to £2.2bn in 2023. The broking business was flat, with increased revenue from FX and money market funds offsetting drops from equities and credit trading.
TP ICAP’s revenue from its energy and commodities business grew 18% last year as volatility in energy trading brought record revenue growth.
In its full-year results the broker said it saw double-digit growth in all three major assets: oil, gas and power.
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Breteau said the energy and commodity business is working with Parameta in order for the firm to monetise more of the trade data as the energy transition accelerates.
Revenue at its equity and fixed income trading brokerage, Liquidnet, fell 1% compared with 2022. Like at the exchanges, subdued trading volumes in equities hit revenue stemming from the asset class. Lower block trading volume at TP ICAP, contributed to a 9% fall.
Trading in equities picked up in the final quarter of 2023, where revenue was up 13%.
TP ICAP completed a £30m share buyback in January and announced a further £30m buyback on 12 March.
After publishing its full year results, TP ICAP’s stock was up more than 10% to 220p in early trading.
The broker went live with Fusion Digital Assets, a spot crypto trading platform last year.
On 11 March, the Financial Conduct Authority said it would allow registered exchanges in the UK to list Exchange Traded Notes backed by cryptoassets. Along with the US Securities and Exchange Commission’s decision to allow bitcoin ETFs, there are strong tailwinds for institutional spot trading.
The London Stock Exchange announced on the same day it would begin accepting applications for bitcoin and ether ETNs in the second quarter.
Crypto has roared back to life after the SEC’s approval of bitcoin ETFs in January. It now trades around $70,000 — a sharp contrast to 15 months ago when it was priced below $20,000.
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