Schwimmer’s LSE-Refinitiv Deal Had Roots at Harvard and Goldman

(Bloomberg) -- David Schwimmer went to Harvard Law School with Senator Ted Cruz and spent 20 years at Goldman Sachs Group Inc., including a stint as chief of staff to then-COO Lloyd Blankfein.

To those who know him, it’s no surprise that the chief executive officer of London Stock Exchange Group Plc is engineering the biggest deal in the firm’s 300-year history, and is doing so less than 12 months after taking the job.

“We thought he would become a well-known diplomat, rather than a leader in finance,” said Lee Wolosky, a Harvard contemporary who has served the last three U.S. presidents in national security positions. “But he was the type of guy you knew you’d be reading about in the future.”

Schwimmer, a 50-year-old New Yorker, steered the planned $27 billion reverse takeover of Refinitiv in a bet that data will define the future of the exchange. He’s taken a quantum step up from the dealmaking of his predecessor, Xavier Rolet, who bought the owner of Russell Indexes for $2.7 billion in 2014 after acquiring a majority stake in LCH.Clearnet.

Schwimmer made a low-key start in August 2018, spending time getting to know the business. Behind the scenes, he was mapping out LSE’s long-term future -- one that’s much less reliant on the low-margin, volume-dependent business of stock trading. At a stroke, he’s taking on prominent fixed-income and currency trading platforms and a global data business that together will make LSE-Refinitiv one of the biggest providers to financial markets.

“When I arrived at LSEG, we went through an exercise to refine our strategic objective to be a leading financial-market infrastructure provider,” Schwimmer said in an interview.

“To achieve this ambition, we needed to become truly global, diversify by asset class and significantly improve our capabilities in data and analytics,” he said. “It became very clear that one way to do that in a single step was a transaction with Refinitiv.”

Global Reach

Refinitiv, the former financial and risk unit of Thomson Reuters Corp., serves more than 40,000 institutions in 190 countries, competing with Bloomberg LP, the parent of Bloomberg News. Its owners, including Blackstone Group Inc., will be among LSE’s biggest shareholders with a combined 37% stake after the transaction. The deal is yet to receive regulatory scrutiny.

Schwimmer, a fan of the Mets baseball team and a keen runner, has a BA in English from Yale and a law degree from Harvard, as well as a Masters in Law and Diplomacy from the Fletcher School, Tufts University.

At Harvard he was studious, and ambitious without exhibiting a ruthless streak, according to contemporaries. Schwimmer won the prestigious best-oralist competition at the annual moot court competition, despite being on the losing team, and was generally well liked.

“Our circle of friends would make trips and have murder mystery nights and he was always game for that, which was not the case with a lot of our classmates,” said Emily McBurney, a fellow Harvard student who now has her own law practice.

Old Rivals

The Refinitiv deal also puts Schwimmer several steps ahead of Deutsche Boerse AG’s CEO, Theodor Weimer, another Goldman alum -- and once a predator of LSE itself. More recently, Weimer was vying for Refinitiv’s currency businesses until the London exchange’s move was disclosed in late July.

Schwimmer’s quiet approach to cementing his firm’s dominance marks a departure from a turbulent period for LSE. His predecessor, Rolet, left in 2017 amid a public spat between the company’s board and an activist investor. And the final plan to sell LSE to Deutsche Boerse AG to create a $30 billion behemoth fell apart when regulators blocked the deal.

Those failures clearly informed Schwimmer’s strategy. While shunning an exchange combination, he hatched a plan for a takeover of similar magnitude that few people saw coming.

“For some dealmakers, its almost like an addiction,” said Jeff Simes, a Harvard peer and corporate attorney. “I don’t think Dave has that bug. He’s trying to solve a problem, and this massive move is going to be his view of what the solution to that problem is.”

As Schwimmer put it in the interview: “I didn’t imagine that I would be sitting in this role, so it’s hard to imagine I would be doing this deal.”

To contact the reporter on this story: Viren Vaghela in London at vvaghela1@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Paul Sillitoe

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