What It Takes: Lessons in the Pursuit of Excellence

by Stephen A. Schwarzman

Thomson Reuters was formed in 2007 when Thomson, a Canadian media conglomerate, acquired the Reuters news service. Its financial and risk division sold news, data, analytical tools, and services to help banks and other corporations trade financial products. But it struggled to compete with its rival, Bloomberg. We first looked at the possibility of buying the financial and risk business in 2013. At that time, it was intriguing but not quite right for us. It reappeared on Blackstone’s radar in 2016. Martin Brand, a partner in private equity, had traded foreign exchange derivatives early in his career. He had used products from Thomson Reuters, and the possibility of an acquisition fascinated him. He and his team saw that the markets misunderstood the business, tagging it as a poor man’s Bloomberg. In fact, it was more like a colossus hiding in plain sight, a market leader in trading government bonds and foreign exchange and providing financial data to companies, banks, and investors. But there was plenty of room for improvement. Costs were too high, the bureaucracy pervasive, and sales and marketing in need of an overhaul. There was also an opportunity to carve out certain pieces of the business, notably Tradeweb, an electronic platform for trading foreign exchange and derivatives, that we thought might be worth more on a stand-alone basis. We knew that the managers of the financial and risk division shared our belief that they could operate more successfully as a private c...

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