STOXX buys Scientific Beta to expand factor and climate indices

STOXX Ltd announced it has acquired Scientific Beta, a Nice-based provider of academic research-driven smart beta, climate and factor indices. The company said the purchase will broaden its index product set for institutional investors worldwide.

Scientific Beta was created within the EDHEC-Risk Institute in 2012 and was previously part of the SGX Group. The firm has about 40 full-time employees based mainly in Nice and maintains teams in London, Singapore and Sydney.

Scientific Beta offers smart beta, climate-focused and enhanced cap-weight indices, along with factor signals and related portfolio solutions. STOXX said it will combine Scientific Beta’s factor research and signal design with STOXX’s index construction and distribution to deliver a wider range of factor indices and scalable index products.

STOXX described the combined capabilities as an end-to-end investment platform covering research, signal development, portfolio construction and benchmark implementation. The company expects the integration to support delivery of cost-effective, rules-based strategies at scale and to deepen engagement with large asset owners.

Gary Retelny, President and CEO of ISS STOXX, commented: “This acquisition will accelerate our strategy to deliver scalable, research-driven, and cost-effective index solutions to institutional investors globally.” Axel Lomholt, STOXX General Manager, added: “The addition of Scientific Beta and its highly talented team strengthens our ability to offer advanced factor research, robust portfolio construction and scalable index implementation within a single, integrated platform.”

STOXX indicated the deal is intended to help expand its footprint in the asset owner segment and provide research-led portfolio solutions that can be used both for benchmarking and for implementation in institutional mandates.