Standard & Poor’s: Dissecting Its Ownership Structure

Standard & Poor’s (S&P), a renowned global provider of financial information and investment research, operates under a complex ownership structure that has evolved over decades of mergers and acquisitions. Delving into its intricate ownership network unveils a fascinating tale of corporate consolidation and industry dynamics.

Who Owns Standard & Poor’s?

Standard & Poor’s currently resides under the umbrella of S&P Global Inc., a diversified financial services behemoth. S&P Global was born out of the 2016 merger between S&P Capital IQ and McGraw-Hill Financial. Thus, to fully comprehend the ownership of S&P, we must trace the lineage of its parent company.

S&P Capital IQ, formerly known as Standard & Poor’s Financial Services LLC, originated as a division of McGraw-Hill Companies, a century-old publishing and education conglomerate. In 1999, McGraw-Hill spun off Standard & Poor’s into a separate entity, Standard & Poor’s Corporation.

Meanwhile, The McGraw-Hill Companies embarked on a series of acquisitions to strengthen its presence in the financial data and analytics sector. In 2001, it acquired RiskMetrics Group, a leading provider of risk management software and services. This move laid the foundation for what would later become S&P Global.

How is Ownership Distributed?

S&P Global is a publicly traded company, with its shares listed on the New York Stock Exchange (NYSE) under the ticker symbol “SPGI.” As of December 31, 2022, S&P Global had approximately 2.4 billion outstanding shares. The distribution of ownership among various shareholder groups provides insights into the company’s governance and control structure.

Shareholder Group	Percentage of Outstanding Shares
Institutional Investors	78.5%
Individual Investors	16.3%
Company Management and Employees	5.2%

Institutional investors, such as mutual funds, pension funds, and hedge funds, collectively hold the majority of S&P Global’s shares. Their influence on the company’s strategic direction and executive compensation cannot be understated. Individual investors, on the other hand, represent a significant minority, but their combined ownership still wields considerable sway.

What Role Does McGraw-Hill Play Today?

While McGraw-Hill no longer holds a direct ownership stake in S&P Global, it maintains a historical connection and ongoing business relationship. Upon the spin-off of Standard & Poor’s in 1999, McGraw-Hill retained a passive ownership stake in the newly created company. However, it divested this stake in stages over the following years.

Today, McGraw-Hill continues to collaborate with S&P Global through its Credit Market Research arm, which provides independent credit risk research on structured finance products and residential mortgages. This partnership demonstrates the enduring linkages between the two entities despite the formal separation of ownership.

Were There Any Controversies Related to Ownership Changes?

The complex ownership history of S&P Global has not been without its controversies. Over the years, the company has faced scrutiny and criticism for potential conflicts of interest arising from its dual role as a credit rating agency and a provider of financial data and analysis.

In particular, the ownership structure prior to the merger with McGraw-Hill Financial raised concerns about whether S&P’s ratings could be biased towards issuers that purchased its data and advisory services. However, S&P Global has repeatedly defended the integrity of its ratings process, arguing that it maintains a strict firewall between its credit rating operations and its other business units.

What Implications Does the Ownership Structure Have for Investors?

Understanding the ownership structure of S&P Global is crucial for investors who trade in its stock or rely on the company’s data and insights. The dominance of institutional investors suggests that the company’s long-term strategic decisions will likely be influenced by the perspectives and expectations of these large shareholders.

Moreover, the ongoing relationship between McGraw-Hill and S&P Global raises questions about potential cross-selling opportunities and potential conflicts of interests. Investors should carefully consider these factors when assessing the company’s prospects and making investment decisions.

Engage with the Author:

1. What other questions do you have about the ownership structure of Standard & Poor’s?

2. Do you believe that the company’s dual role as a credit rating agency and a financial data provider raises any potential biases?

3. How do you think the ownership structure might evolve in the future?

Share your thoughts and opinions in the comments section below. Your insights will help enrich this discussion and provide valuable perspectives for other readers.