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US activist hedge fund Elliott Management has privately assured the UK government about its intentions for the future of the London Stock Exchange after building a significant stake in its parent group.
There have been talks between the activist investor and government officials to assuage fears that Elliott might push for a break-up of the group or a spin-off of the LSE, according to people familiar with the discussions.
They added that the hedge fund also dispelled concerns that it might push to shift the group to a New York listing, where rival venues trade at a higher valuation multiple.
Elliott had taken a position in London Stock Exchange Group and is engaging with the company to improve its performance, the FT reported earlier this month. LSEG shares have fallen by 31 per cent over the past year.
The hedge fund run by billionaire Paul Singer reached out proactively to the UK government, said one person familiar with the discussions. The activist investor also holds stakes in other London-listed companies, including BP and Anglo American.
The Treasury is sensitive to the health and fortunes of the LSE and the news of Elliott’s investment immediately triggered discussions within the department, a second person close to the situation added.
The Treasury, LSEG and Elliott declined to comment.
News of talks between the government and Elliott comes as LSEG prepares to unveil its annual results on Thursday, during which chief executive David Schwimmer is expected to publicly address the group’s engagement with Elliott for the first time.
Investors will be scrutinising whether LSEG will reveal further share buybacks, a move that Elliott is pushing for, according to people familiar with discussions between the company and the activist.
Schwimmer is likely also to address concerns over the future of the business in the face of AI. The exchange group’s shares have dropped over the past year as shareholders worry about how disruptive AI will be to the business.
The Treasury has made reviving the UK’s capital markets a priority and has worked with regulators and the LSE on slashing red tape to encourage more companies to list and raise money in London. Chancellor Rachel Reeves said last month that she believed the City was entering a “new golden age” amid hopes there could soon be a revival in London listings after they hit their lowest level in 30 years.
Another person familiar with the discussions said it was “unsurprising” that the government had a dialogue with Elliott, given LSEG’s “national importance” to capital markets and the flow of money in the UK.
Through its $27bn acquisition of data group Refinitiv in 2019, LSEG has grown into a financial data giant, making most of its money by selling markets data to banks, brokers and investors. The company made less than 5 per cent of its revenues from equities in the third quarter of 2025.
Previous takeover attempts of LSEG by Deutsche Börse in 2016 and Hong Kong’s HKEX in 2019 provoked concern among British politicians because of the stock exchange’s role at the heart of the UK financial markets.
The UK’s national security regime was “sufficiently open to interpretation” that the government could review an overseas investor’s stake in the LSE, one City lawyer said.
The National Security and Investment Act includes aspects of financial and data infrastructure, which it defines as “physical or virtualised infrastructure used for storing, processing or transmitting data in digital form or infrastructure” — which could capture LSEG.
The City lawyer, who is not advising either the activist or the company, said: “Elliott’s proactive approach could be a way of assuring the government there is no threat or need to trigger review.”
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