TMX Group buys RAFI Indices for $490 million, tripling indexing assets

TMX Group Ltd. agreed to acquire RAFI Indices LLC from Research Affiliates Global Holdings for US$490 million ($683 million), a deal that more than triples the assets under indexing at its VettaFi subsidiary and deepens its push into the global index licensing business.

"The combination of RAFI's fundamental indexing methodology with VettaFi's distribution platform creates a scaled competitor in a market growing at 13% to 18% annually," said John McKenzie, chief executive officer of TMX Group. "This acquisition accelerates our long-term strategy to diversify revenue toward recurring, global sources."

RAFI Indices, founded by Research Affiliates chairman Rob Arnott, pioneered the fundamental indexing approach that weights companies by economic size rather than market capitalization. The acquisition adds equity portfolio coverage across developed and emerging markets to VettaFi's existing suite of more than 1,250 indexes spanning all major asset classes.

The deal marks TMX Group's second major indexing acquisition in less than three years. The exchange operator paid US$1.03 billion in early 2024 to take full ownership of VettaFi, a U.S.-based indexing and analytics firm. Since then, VettaFi has expanded through additional purchases including a suite of nuclear energy indices from Range Fund Holdings.

TMX Group's Global Solutions, Insights and Analytics segment, which houses VettaFi, has been the company's fastest-growing division. The segment generates more than 80% recurring revenue, according to the company's prior disclosures. The RAFI acquisition is expected to close in the second half of 2026, subject to customary regulatory approvals.

The indexing industry has become a battleground for exchange operators seeking fee-based revenue streams less dependent on trading volumes. S&P Global Inc., MSCI Inc. and FTSE Russell dominate the space, with the global indexing market valued at roughly $5 billion and projected to grow to $8 billion by 2027, according to industry estimates cited by TMX Group.

Evercore served as financial adviser to TMX Group on the transaction, while WilmerHale LLP provided legal counsel. Barclays advised Research Affiliates, with Ropes & Gray LLP acting as legal counsel.

This article is for informational purposes only and does not constitute investment advice.