James September-October 2024 web - Flipbook - Page 44
From oil to natural gas and environmental products, in times of peace
and times of conflict around the
world, all this is emblematic of how
ICE changed with the times to help
our customers manage risk.”
The company was becoming a
powerhouse, but what made national
and international headlines in late
2013 was ICE’s approximately $11
billion acquisition of the citadel of
American capitalism: the New York
Stock Exchange. The New York Stock
Exchange is home to 2400 of the
most iconic and disruptive issuers
in the global economy. The stunning
buy occurred, it should be noted,
with Sprecher at the helm while
wife Kelly Loeffler worked as head
of ICE’s marketing and communications as well as investor relations
when the company went public. (She
married the CEO in 2004 and later
left the business to serve as a U.S.
Senator from Georgia from 2020 to
2021.) Sprecher notes that ICE going
public in 2005 on the NYSE was
an inflection point for the company
and tapping into the capital markets
allowed the company to scale.
Eleven years since the acquisition there have been changes at the
232-year-old NYSE, including its first
woman president and its first woman
and African-American chair. While
there have been several technology
upgrades behind the scenes, they
renovated and created event space to
allow for listed companies to commemorate milestones with the iconic
building as a backdrop. In addition,
ICE’s board of directors is currently
comprised of 60 percent women, a
rarity for public companies.
Nine years ago, Sprecher acquired Interactive Data Corporation
for $5.2 billion. That formed the basis
of ICE’s Fixed Income and Data Services business, which delivered $2.2
billion of ICE’s $7.9 billion in net revenue in 2023 alone. Through data and
analytics, ICE’s risk management
44
JAMES
SPRECHER WITH WIFE AND FORMER U.S. SEN. KELLY LOEFFLER.
tools allow customers to identify potential opportunities across all asset
classes. And now, he says “artificial
intelligence and large language models are presenting new opportunities
that could help grow the business in
the future.”
He describes ICE as an “all-weather company,” thriving through its
exchanges and clearing houses,
fixed income and data services and
mortgage technology segments. It is
“an all-weather company continuing
to focus on creating and supporting
technology that allows our customers
to manage and navigate global risk.”
Perhaps Sprecher’s biggest bet
may be applying the ICE digital
playbook to the traditionally slow
and error-prone mortgage industry.
He explains that “When inflation
and mortgage rates spike, that has
one effect on one part of our business, but when geopolitical tensions
flare, that has an opposite effect on
another part of our business.” In a
2023 letter to shareholders, he wrote,
“No other sector has felt the impact
of the Fed’s higher-for-longer stance
on interest rates more acutely than
the U.S. housing market.” He said
Rahm Emanuel, the former mayor of
Chicago and President Joe Biden’s
ambassador to Japan, is famous for
saying, “Never let a serious crisis go
SEPTE M B E R/O C TO BE R 2 0 2 4
to waste.” So his $11 billion acquisition of Ellie Mae in 2020 and last
year’s $11 billion acquisition of Black
Knight, which further boosts growth,
is laying the groundwork for ICE’s
next chapter. He says, “I think it’s
easier to start a new initiative and
have market acceptance of your
initiative during periods of stress,” or
“crisis,” as Emmanuel put it.
From his vantage point now,
though, Sprecher says companies usually “don’t have time and they don’t
have the inclination to change their
business practices to look at something new. When everybody is rocking and rolling and making money, it’s
hard to say, ’Why don’t you put aside
what you’re doing and try something
different?’ And so, this period that
we’re in right now of a higher interest
rate environment, relative to the past
few years, has encouraged people in
the consumer finance and mortgage
businesses to reevaluate the way
they go to market. And many major
companies have been very receptive
to the digital mortgage underwriting
and acquisition and sales platform
that we’re building. That’s because
they are taking stock of the current
market and preparing themselves for
the opportunities that lie ahead in the
lower interest rate environment that is
expected sometime soon.”
