Meridian Hedged Equity Fund on Intercontinental Exchange Inc.
Thesis
Intercontinental Exchange operates a diversified portfolio of exchanges, clearing houses, market-data businesses and mortgage technology platforms across several major asset classes. Its breadth provides exposure to trading, clearing and data revenues across energy, financials, fixed income and U.S. residential mortgages. During the quarter, however, the stock was pressured by competitive concerns around perpetual futures and weaker trading revenues, highlighting the key issues affecting the holding.
“Additionally, performance was weighed down by a sequential decline in trading revenues and tough year-over-year comparisons.”
Key risks
- Regulatory approval of competing perpetual-futures offerings raised concerns about institutional activity shifting away from traditional exchanges.
- Trading revenues declined sequentially during the quarter.