Call in the Global Specialist (31/7): Global Sector Specialist Commentary

Research evidence excerpt

Call in the Global Specialist (31/7): Global Sector Specialist Commentary

r or 3% of ffloat, Munich Re SI

is 2 ADTV to cover or 1% of ffloat

Long Tradeweb (TW): The recent competitor transaction in electronic credit has weighed on TW's multiple, but I think the

market has the story backwards. The deal is being interpreted as evidence of rising competition and pressure on credit trading

economics. To me, it's a validation of the secular credit electronification theme that Tradeweb is already levered to.

When firms are willing to pay up for exposure to a market, it usually signals confidence in the opportunity set rather than concern

about its future economics and I think the market is missing the signal here that this is a vote of confidence in the size of public

credit markets and therefore the potential for an uptick in credit trading volume in the coming years. This is particularly important

in credit, where adoption continues to increase and scale, liquidity and workflow integration remain critical competitive

advantages.

Meanwhile, the fundamentals at TW remain intact. In 2Q26, credit revenues grew 3% y/y to $128mn despite softer volumes, with

higher fees per million offsetting activity pressure. That's not what a market under pricing pressure looks like. Rates revenue

increased 10% y/y to $302mn, while EBITDA margins remained above 53%, supporting continued margin expansion through

FY26.

Importantly, buying assets is not the same as replicating network effects. TW's position has been built over years through client

connectivity, liquidity aggregation and a multi-protocol trading model. If anything, industry consolidation often leads to more

rational competition over time.

There is also meaningful growth optionality beyond the core story.