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Exclusive: Singaporean Fund Swoops On Markit

(c) Sky News 2013

Singapore's main sovereign wealth fund is in talks to buy a stake in Markit Group, the fast-growing financial data provider that has become one of Britain's most successful private companies.

I have learnt that Temasek Holdings, which manages hundreds of billions of dollars of Singaporean state funds, has been approached about taking a minority shareholding in Markit, which provides information across financial asset classes such as credit default swaps.

Markit was founded by Lance Uggla, a Canadian former bond trader, in a barn at the bottom of his garden not much more than a decade ago, and is now regarded as a key component in the financial infrastructure relied upon by investment banks and traders around the world. It now employs more than 2500 people and has offices around the world.

The talks involving Temasek are at a very early stage, according to insiders, and may not result in an agreement.

"It has got past first base, but there's still a long way to go," one source told Sky News.

Markit's existing shareholders include its management team and some of the most powerful investment banks on Wall Street and in the City.

It is unclear whether Temasek would acquire shares held by management or Markit's institutional investors.

Temasek owns stakes in some of the biggest companies in the world, including Bank of China, Bharti Airtel, the Indian telecoms group, and Chesapeake Energy Corporation (NYSE: CHK - news) , the American natural gas producer.

Mr Uggla, who in October was named the Ernst & Young Entrepreneur of 2012, owns a stake in Markit that is on paper worth at least £160m, according to last year's Sunday Times Rich List. Investment banks have been pushing for the company to pursue a stock market listing, and any stake sale to Temasek would be likely to precede such a move.

The company's founder is not short of ambition: he has said that he wants Markit to become "the Google (NasdaqGS: GOOG - news) of the financial world" and aspires to creating a more respected financial information empire than those of Bloomberg, Thomson Reuters or McGraw-Hill.

One of Mr Uggla's few setbacks since founding Markit came in 2011, when the company lost out in a bidding war for control of LCH.Clearnet, the clearing house, which is now in the process of being bought by the London Stock Exchange (LSE: LSE.L - news) .

Markit already has some external shareholders, having sold a 7.5 per cent stake to General Atlantic Partners, a technology-focused US private equity firm, in 2010. That transaction valued Markit at $3.3bn, and the company's revenues and earnings have both risen significantly since then.

Bankers estimate that Markit is now worth in excess of $5bn, making it a strong candidate to enter the FTSE-100 if it opted to list on the London Stock Exchange.

Temasek declined to comment, while Markit could not be reached for comment.