Good afternoon, ladies and gentlemen, and welcome to the Deutsche Börse Group Investor Day 2020. The event today is split into two parts. During the first part, which will last around 60 minutes, we are presenting our midterm growth strategy Compass 2023. The second part will be the Q&A session. For financial analysts and investors, there is the possibility to register questions already during the entire event via the Q&A tool below the video screen you see in front of you. Let me now hand over to our first presenter, Theodor Weimer, Chief Executive Officer of Deutsche Börse. Theodor, the floor is yours.
Thank you, Jan. Welcome, ladies and gentlemen, as well from my side. Thank you for joining our today's Investor Day. I do hope we will have an exciting two hours together. We have named our today's session Growth: Growth in Uncertain Times. The pandemic, ladies and gentlemen, will not stop our interaction with you, as you can imagine, all the other way around. We are living in Corona times. It is a must do that we conduct this meeting in a completely different manner. As I always say, better safe than sorry. The pandemic will not stop us, as I said, from discussing our strategy with you today. Nevertheless, I am looking forward to better times when we can meet face-to-face even.
Today, my colleagues and I will give you an update on the progress we've made, and more importantly, we will present our outlook of the multitude of growth opportunities ahead of us. Given the virtual format, ladies and gentlemen, we consciously decided to keep our presentation short and concise and focused. Of course, at the end of the session, we will have ample time for Q&A. Who is with me today? I'm very glad to have Gary Retelny with us, the CEO of Institutional Shareholder Services. Just yesterday, we have signed our transaction with ISS. I'm very pleased to introduce Gary to you. The same applies for Sebastian Ceria, our CEO of Qontigo. He runs our data analytics and index business. He's determined to build state-of-the-art investment products of the future. Of course, we have got Gregor Pottmeyer, our well-known CFO with us, and Thomas Book.
Thomas will show that we are well-positioned to deliver scalability and growth via product innovation and partnerships at Eurex, our most important business segment. Stephan Leithner, who assumes responsibility for the whole pre-trading and post-trading area, will focus in his presentation today exclusively on the fast-growing investment fund service business. Be assured, he's the mastermind behind our Qontigo, UBS Fondc enter, and Clearstream growth initiatives, and he was very instrumental in getting our Institutional Shareholder Services transaction done. Let me now also introduce some very important business segment heads who are with us today for specific reasons. Peter Reitz, the head of EEX, who runs the fascinating business, which combines global capabilities with local expertise. Carlo Kölzer, our head of 360T, who runs a fast-growing and award-winning foreign exchange business.
A combination of OTC and on-exchange businesses, and I'm delighted to announce that Carlo will assume an extended role in driving our adjacent growth initiative going forward. Chart one, how do we want to structure the first 60 minutes? Part one is a brief recap, what have we achieved? Part two gives an overview, what is the way forward? What is the core of our Compass 2023 program? Part three will detail our key initiatives going forward, and part four translates all of this into financials. Let me begin on chart two with a review of our achievements over the past three years to better frame the evolution of the current strategy. When I joined in 2018 in January, Deutsche Börse, my first impression was this is a great company. It is highly profitable.
It has an amazing market expertise and a very strong technological competence base. It's still far too dependent on the cyclicality. It has to run faster on its own accord. It has great potential in doing so. That was my assessment. We need to capture new asset classes, especially in the data and analytics space. With this in mind, we developed the Roadmap 2020 in 2018. The primary goal of the Roadmap was to strengthen organic and inorganic growth. Now after three years, there is time to say, how did we perform over the last three years? Looking at a scorecard of the Roadmap 2020, my humble conclusion is mission pretty much accomplished. No reason for self-complacency, of course, but I think we delivered. We have made ambitious promises, and we have kept them despite a very challenging environment, especially during the year 2020.
A great thank you to all of my colleagues around the globe who have made this possible. Our financial performance, with 9% revenue growth and even 12% bottom line growth, was very strong, speaks for itself, and is well within our target range. In strategic terms, most boxes can be ticked. We consistently delivered secular net revenue growth of 5% per year, and in this context, it was instrumental to focus the steering of the company entirely and specifically on the secular growth, which was a paradigm shift for the company. You analysts and investors may remember, back in 2018, we did not give any guidance on the M&A side. We've worked hard to identify and execute upon attractive inorganic opportunities. Overall, we have executed more than half a dozen of deals over the last three years.
Aside from several smaller deals, the acquisition of Axioma in 2019, UBS Fondc enter in 2020, and most recently, ISS, a couple of hours ago, were the most important ones. We also made very good progress in the rollout of new technologies, especially in the field of multi-cloud strategy, where we managed to become a lighthouse player and a protagonist, at least in Europe. Last but not least, we successfully implemented our famous SPIP EUR 100 million structural cost-saving program. Why am I mentioning this? I do think we have significantly strengthened our execution discipline. On the next chart, you can see, and this is the most important part of today's presentation, what is the way forward for Deutsche Börse? Let me first draw again your attention to the title of our today's presentation, Growth in Uncertain Times. We choose this title carefully and thoughtfully, be assured. Chart four.
I want to share with you our 10 convictions that served as a guiding principle for the strategy Compass 2023. First, we want to maintain and even accelerate our overall growth ambition. We are a growing company, and we want to be perceived as a growth stock. We do target 10% growth rate per year on the revenue side. Two, 50% of our growth continues to be secular net revenue growth. This is what we as an organization can drive maturely. It is in our hands. 5% growth per year is homemade and fairly stable. We have demonstrated this over the last couple of years. Three, over the next three years, we are expecting for the group overall, no cyclical tailwinds. Some of our businesses will face hefty headwinds, others will benefit from positive market volatility. We see a different development in the different segments.
We may discuss this later on. Four, M&A will further increase. It's important for us. We expect a 5% revenue growth rate stemming from acquisitions from the year 2020 till 2023. With yesterday's announcement of the acquisition of ISS, we've already achieved half of it. 5% growth rate per year is not an unrealistic number. We are generally open for larger deals. We continue to pursue asset class expansion rather than stock exchange consolidation. We do have the skills and the funds for such endeavors. Five, ESG is emerging as a powerful new asset class. ESG will become a sweet spot of our future strategic efforts. Six, operating costs at Deutsche Börse will not be steered according to the overall revenue development and growth rate. We'll consequently steer our cost base in line with our secular growth we are targeting. Cyclicality must not affect our growth initiatives.
Seven, our EBITDA margin, anyways, and already right now pretty high, shall remain at high levels what we have already achieved. We do want to keep these EBITDA levels. Eight, we will continue with the investments into new technologies like cloud and distributed ledger technology to tap into new revenue pools, revenue opportunities, and to increase the operating efficiency of our franchise over time. We are willing to invest in adjacent growth areas through our corporate venture portfolio. We've got a strong corporate venture portfolio arm, and in combination with a new platform for a serial creation of marketplaces for new asset classes. Carlo will detail this later on. Nine. We expect next year to be somewhat cyclically muted because of the high volatility this year and lower interest rates we have to live with.
This will not throw us off course with regards to our secular growth opportunities over the upcoming three years. Ten, finally, we think that our strategic plan firmly underpins further and even accelerated growth rate at Deutsche Börse. Our strategy is also flexible enough to allow for adjustments if Covid-19 or any other unforeseen circumstances require. I explicitly mention that we have prepared and developed a contingency plan, which can get activated quickly if necessary. Let me go to the next chart. Despite the extremely dynamic market requirement over the last couple of months, we firmly believe that the underlying secular drivers of our business are fully intact, regardless of Covid-19 and V or U-shape recovery scenarios. Over-the-counter to an exchange is structural, and the shift to central clearing is even reinforced by the Brexit. Our trading businesses will continue to taking advantage for it.
Our institutional funds business will benefit from this trend to outsourcing of the banking industry. The importance of the buy side to shift to passive investments and products continues. ESG is a major generational topic, as you all know. It has, and I take this word consciously, it has historic dimensions. This is a big opportunity for us as a group. On chart six, all those trends are translated into concrete secular growth opportunities, and I'm leaving aside, for the time being, ISS, because we will address this separately later on. Let me point out the most significant growth initiatives. In pre-trading, the combination of index and analytics under the Qontigo roof will help us to increase buy-side penetration and become a leader in the area of investment intelligence.
At Eurex, these trends will give us the opportunity to introduce many new derivatives products and continue to build a leading OTC clearing platform in the Eurozone. At EEX, we will further expand our leading position in European energy markets and win more businesses in the U.S. and even beyond. For the exchange, we have created a one-stop shop for exchange and OTC solutions based on our superior leading technology. It is now time to further capitalize on this unique position, and the numbers in 2020 speak for itself. At Clearstream, we will continuously onboard new clients to grow our custody business and franchise and strengthen our leadership position in the funds business. The broad and diversified set of growth opportunities is clearly one of the strengths of our business model. Furthermore, it emphasizes how robust our business is.
On chart seven, we will talk a little bit about the M&A agenda. Rather than engaging in complex transformational situations that tie up resources across the entire value chain and the entire group of Deutsche Börse, we are using inorganic acquisitive growth to increase the size and the scale across different asset classes. This strategy has already worked fairly well out. We are going to stick to it. Let me briefly summarize some important strategic guidelines for our M&A activities. We approach M&A like investors. Long-term value creation for our shareholders stands above everything else. There has to be a strong strategic fit. It needs to be a good and convincing equity story for you. There has to be a very clear path for integration and a very clear scenario for synergy realization. We need to be strong on the post-merger integration side.
In case of publicly listed assets, we need a high closing certainty before we engage intensively. We all know it is possible, and if it's possible, we will avoid situations where assets were auctioned to the bidder of the highest price. That is, for us, always a difficult situation. We prefer formats where we are not owning 100% of the assets. Minority owners could be the management, could be the seller itself or a strategic partner. With a partnership approach, we think M&A can be done even more successfully. We are prepared to enter into larger deals, as you have seen over the last 12 to 18 months. These larger deals are not a must. Deals need to be strategically and financially compelling. That is the promise, what we are giving. Let me make an important point also in the context of M&A.
In the past, Deutsche Börse was perceived to be unable to successfully partner up with clients and third parties. We think there has been a lot of change since then. In terms of M&A, we have created an environment for entrepreneurship and found the right balance between, on the one hand side, control and, on the other hand side, independency. Let me stress this today. The entrepreneurial spirit of the businesses which we have acquired also had a very positive effect on the rest of the organization of Deutsche Börse Group. Our acquisitions made us more agile. They are challenging us, and we are learning from the acquisitions. They are true trusted partners for us and not just participations. The partnership approach was a very important element of the ISS acquisition, and the way we acquired and integrated Axioma.
Next chart, let me briefly describe the strategic rationale of the ISS acquisition in my own words. ISS is a global leader in corporate governance. ISS is famous for providing governance research, advisory solutions, and end-to-end voting solutions to the market globally. ISS is a very successful company. It is growing and has a decent profitability. It will add substantial recurring revenues with more than 90% recurring revenue ratio. ISS is a perfect strategic fit to us and highly complementary to our existing businesses. It's a data-driven company and precisely an analytics data-driven company. It has access to a very broad buy-side client base, and I cannot stress this factor enough, ISS is a top player in the ESG business. Their leading advantage and their leading notch in the G, the governance, is a huge advantage.
Beyond the ESG business, there are promising links across the full value chain of Deutsche Börse. ISS is a well-known global brand name. You all know ISS. ISS comes with an experienced and very strong leadership and management team. Gary, the CEO, is a passionate and highly respected leader internally and in the external world. On chart nine, I would like to summarize and underpin the following. ISS will help us to significantly expand our ESG business, a big, fast-growing, and a very important data business of the future. ISS and Qontigo are perfect partners on the ESG side. ISS and Clearstream will benefit mutually from their respective businesses and client relationships.
To cut a very long story short, ISS is a best-in-class provider for ESG and stewardship solutions, a data provider, which fits perfectly with our leading position as a capital market infrastructure provider, and it fits perfectly with our strategic ambitions. On chart 10, let me summarize our growth strategy in financial terms. With Compass 2023, we are pursuing a simple, but we think a very realistic growth formula. The growth formula is: we think we can achieve a 10% top-line growth and a 10% bottom-line growth as well annually. On the top line, 5% secular growth is what we have achieved so far consistently. Therefore, we think this 5% growth rate is realistic over the next coming years. On the bottom line, indeed, M&A is structurally dilutive on the margin side because we are coming from such a high margin.
On the other side, we are committed to keep today's margin levels. By the way, cyclicality may help us otherwise, and hopefully. The scalability of our business shall work and has worked in the past. If necessary, I will stress this again, a contingency plan can get activated quickly if necessary. As a consequence, a 10% EBITDA growth rate is our target and can be achieved. That's our formula, 10% top line and 10% bottom line. At the end of my presentation, I'm very happy to hand over to Gary. Gary, let me emphasize, we have been deeply impressed by the culture and the senior leadership of your organization. We very much look forward to partnering and to working with you. As you said to me on Sunday, two days before we have signed our documents.
You said, and I'm citing, "Theodor, it is an incredibly powerful strategic move for both of us and for both firms." I would like to echo this today, Gary. I will say from my side, we will make everything to make our partnership a great success. Thanks for tying your future to ours, Gary. The floor is yours.
Thank you very much, Theodor, for your very kind comments and for the trust that you and your management team have placed in ISS, myself, and all our people. We are humbled by it. We are thrilled to be a member of the Deutsche Börse family of companies. Let me take just a few minutes. Welcome, everyone. Good morning here in New York. Good afternoon. Just give a fairly brief summary of ISS as Theodor kindly said, I think that most of you are familiar already with ISS and its global presence. Let me just take a few minutes to highlight some statistics, and give you a little bit of a sense of ISS and its very exciting future prospects as part of the Deutsche Börse family of companies. ISS is an innovative global leader in data and research, and centered primarily around corporate governance and ESG.
We believe we are the global leader in corporate governance, and have been so for over 35 years. Our position in broader ESG and distribution services as well, has been quickly accelerating. We empower investors and companies to build for long-term and sustainable growth, and we believe we provide best-in-class data, analytics, and insight. Our global reach is wide. We have a large and diverse client base of over 4,000 clients. We focus clearly on the global reach, but as well with a very strong customer service and local touch. We believe we're primed for continued growth going forward, both organically and through acquisitions, as I will touch briefly. ISS today, we are over 2,000 people. We have 33 offices around the world. We operate physically in 15 countries, and we cover 115 markets around the world.
What is important to note in the 115 markets is that as part of our commitment to clients, ISS commits that if a client holds a security in their portfolios, an equity security in their portfolio, we will cover it for them on a governance basis. We cover approximately 40,000 meetings a year. If you don't mind turning the slide. ISS is a very well-established global business. We have an excellent organic and inorganic growth track record. As you can see from the graph that is being presented, if you look at our 2014 to 2020 estimated net revenue growth, you will see a 15% CAGR, which is quite satisfactory and in line with our targets. Our growth is focused primarily on both organic as well as acquisition growth.
I've tried to do here is give you a little bit of a sense of the acquisitions that we have made over the past six years. We have done 11 acquisitions. I'm not going to cover all of them here. Six of them focused primarily on ESG, three of them on data and analytics, and two in data and distribution. I will say is that ISS focusing on recurring revenue businesses, that is our business model, as Theodor noted. Over 90% of our revenues are recurring, which is in line with the way that we target our growth. We are very focused on acquisition of data companies, as well as companies that obviously have recurring revenue business models much like ours. We look at tuck-in acquisitions as part of our global growth strategy, particularly in the ESG space.
I am very pleased also to note that our pipeline today is actually quite full, and we are looking at a number of small tuck-in acquisitions that would be highly complementary to our ESG growth efforts as well as our data and distribution growth initiatives. If you don't mind turning the page. ISS ESG permeates all five businesses currently that form part of our ISS group of families. We focus on service, serving investors and corporations. The five business lines within ISS, just to briefly touch on them, are ISS Governance business. That's what everybody knows generally about what ISS does on a global basis. We provide governance research and advisory services, as well as end-to-end proxy voting solutions, as Theodor mentioned. Our second business line is our fast-growing ESG business. There are many exciting initiatives within this business line.
I'll touch on some of them briefly as they relate in particular to our growth initiatives with Deutsche Börse. Third business line that we have is our corporate solutions business. That focuses on helping companies design and manage their governance, compensation, and sustainability programs. The fourth business line is what we call our ISS MI business. That's our market intelligence business. That is essentially a data insight research and workflow solutions business, focusing on global asset managers and distributors. Last but not least, is our ISS media business. Within that business, we have three of the leading conferences in the world for the investment management industries. If you aggregate these businesses a little bit differently, you will see that 75% of our business relates to ESG and stewardship solutions, 23% to our data and distribution, and 2% in media.
I'm not going to touch in great detail on this, but underneath all these businesses is a very strong integrated data and technology infrastructure that drives product innovation. We're very pleased with our data collection and data management initiatives. We believe that they are world-class, and I'll briefly touch on those in a minute. If you don't mind turning the page. We just thought that we would give you a graph that just highlights the growth in the ESG market in terms of data spending. You see on the growth on the left that you see 20% growth per annum growth on ESG data spending, and you actually see 35% annual growth on ESG index spending.
ISS is very prominent in both of those sectors and looking to expand our products and services, particularly as we see the various initiatives across the Deutsche Börse group of families, as Theodor mentioned. If you look to the right of the slide, you will see a number of our business lines. I'm not going to touch on all of them in great detail, but you will see, particularly if you go down to the bottom two, our ESG screening data research ratings index, climate and cyber businesses. Note that we have recently done an acquisition in cyber ESG ratings. We believe that that is a unique and key differentiator for ISS in the future.
We also, if you look to the bottom of that right-hand side, you will see the index and analytics businesses of course, Deutsche Börse STOXX, DAX, and Axioma, the Qontigo businesses, where we think we have fairly significant revenue synergies, and we look forward to working together with Sebastian and his team in the very near future. Very exciting prospects. If you turn to the next slide and my final slide, I just wanted to provide essentially a little bit of the roadmap that we see going forward. We believe that this partnership with Deutsche Börse, it strengthens dramatically the pre-trade business. We look forward to being a part of it. We look for it to provide significant runway for growth for ISS. If you look to the categories on the left, we see future ESG growth on multiple fronts.
We believe that this will catapult Deutsche Börse into being a global leader once the transaction closes. ISS is a global leader in the ESG space today. We believe that with the backing of Deutsche Börse, as well as their global footprint, this will only accelerate our product and M&A roadmap in the space. Number two, we have a very strong and diverse client base, both of us. Our strong global brand has translated into access to 4,000+ clients. We have high buy-side exposure, including 2,000+ asset managers, including the global top 10. We believe that we are regionally complementary. We have a very strong U.S. franchise and brand. Our brand happens to also be very global and well-known. We hope to leverage Deutsche Börse's strong European brand and network as well to expand in EMEA and Asia Pac regions. We think our businesses are complementary.
There is very little overlap, which is extremely exciting, therefore presents a number of revenue synergy possibilities that we're very excited about. We have very complementary product offerings already within ISS and strong linkages already to a number of the Deutsche Börse businesses. We are looking at concrete revenue synergies in pre- and post-trading. Finally, we have what we believe are strong operation skills. We have successfully integrated 12 acquisitions. We have strong and deep experience in operating emerging market data and processing centers. That is one of the core strengths of ISS. We're very proud of our teams based in Manila and in Mumbai, and we believe that Deutsche Börse also will be able to leverage those resources, and we hope to be of assistance.
The final statement that I will make, which is extremely important for our clients, is that our research and advisory activities will continue to operate on a fully independent and arm's length basis. That basically is a tenet of what ISS has been built on over the last 35 years, and that is expected to continue. With that, again, thank you, Theodor, for your kind words. We're very proud of this achievement, and we look forward to working together for many years to come. Back to you, Jan.
Thank you, Gary. Our next speaker today is Sebastian Ceria. Sebastian is the Chief Executive Officer of Qontigo, our index and analytics business, and he will present opportunities exactly in that area. Sebastian, the floor is yours.
Thank you, Jan, and welcome everybody from the New York office of Qontigo. It's great to be here today, and I want to take just one second to congratulate Gary and the ISS team for joining the family. We've been working together for quite some time with ISS. We've created great products together, and we're really looking forward to creating a lot more magic when you're inside the family. Welcome, Gary, and welcome to the ISS team. Boy, it looks like a lot of time has gone by since we did the acquisition, but it's only one year that has taken place. Let me remind you the reasons behind why we did the acquisition. We really thought at the time that the union of indexing and analytics was going to create intelligence that would give tremendous value to our clients.
I'm not going to go through all the key drivers of secular growth that you see on the left, but what is important is to remember that we thought that these secular drivers were going to drive double-digit growth of 15% until 2023, and easily double-digit growth over 10% per year, if you actually took out the effects of the Axioma acquisition. Next slide, please. What we did not expect, I did not expect, and I'm not so sure what I would have done if I knew what was coming, that the COVID crisis was going to hit. I've learned, by managing Axioma through other crises in the past, that although crises tend to be paralyzing, actually, there are great opportunities for disruptors.
Let's not forget that we're a challenger, we're a disruptor in this space, and what we want to get is we want to get events that break the inertia in the marketplace, and that's exactly what COVID does. I know that you might think that I'm a glass-half-full kind of guy. I am, and I'm entrepreneur, so as such, I tend to think that actually everything that happens is for a reason and is actually going to turn out right. If you really think about what has happened with COVID, and we go one by one through those effects, we just see that this is creating nothing but more opportunity for Qontigo. There is going to be inevitably a higher requirement for sophistication in the investment solutions that the asset management industry provides to its clients. For that, we're going to need to mix indexing and analytics.
There's no other way to create that intelligence. We know that brands are going to be important, and to have to rely on the brands of STOXX, DAX, and Axioma as a way to get to the client base is a great way to succeed. We know that the public debate between active and passive is going to do nothing but intensify, because in this times of COVID, we realize that passive products are actually getting excellent performance. That, of course, is very different for what's happening in the active space. That reduction in fees, that compression in fees, is going to lead to our clients really looking to make investments in technology, because that's the natural way for them to reduce their costs. Ultimately, what we had seen as a trend in ESG is going to do nothing but intensify. It's going to provide a disruption.
It's going to provide an opportunity for the asset management industry to reinvent itself and to actually grow even more. It's going to provide an opportunity for us to really provide very creative solutions. With welcoming ISS to the family, that's going to do nothing but intensify our opportunity. Next slide, please. Let's talk about what's going to happen next year. How do we go back or how do we go to double-digit growth, which is what we intend to do? Well, there's two pillars to our strategy. On one hand, we want to do what we were doing before and doing it better. We want to leverage our optimization expertise to go into the wealth space. We want to grow even more with ETFs and asset-based fees.
We want to continue and enhance our collaboration with Eurex to provide a whole ecosystem of investable products to our clients, so that they can leverage our IP. We want to, of course, leverage new partnerships to get to the marketplace and reach segments that we could not reach before. Of course, that's just half of it. The other half is to create new and innovative products. We think that there, sustainability is a key component where we can bring together indices and analytics and provide a whole sustainable solution. We also think that by expanding our solution to the cloud of all the products that we had on the analytics space, we're going to be able to help our clients to really leverage technology to reduce costs and to achieve those economies that they need to achieve.
For this reason, we've had a new tagline, and this new tagline is, "Qontigo: Optimizing Impact." Thank you very much.
Thank you, Sebastian. Our next speaker now is Thomas Book. Thomas is Member of the Executive Board of Deutsche Börse, and he's responsible for our trading and clearing division. Thomas will present the opportunities in trading and clearing overall, but in particular in financial derivatives. Thomas, the floor is yours.
Jan, thank you very much. It's great to be with all of you here today. Let me continue the value chain with trading and clearing. Trading and clearing comprises our three leading franchises, Eurex, EEX, and 360T. In the course of this year, we have also added the cash market business and the market beta business to the portfolio. Last year, I spoke to you about our growth opportunities stemming from the three prevailing industry trends that we have also heard earlier from Theodor and Sebastian, which are changes in investment themes, regulation, and technology. All of these are framed by our core ambition to be the preferred venue of choice for the buy side. Despite COVID, all these trends are fully intact. Indeed, some of them have even accelerated, such as the trend towards electronification, but also the trend towards sustainable investment.
Now how do we exploit these growth opportunities? Our platform for growth is the combination of synergetic assets within our group. We are operating deep liquidity and margin pools for benchmark products, combined with leading risk management and superior technology. We are very proud we have a world-class team that operates with excellence and that provides continuous innovation and a strong senior leadership team. Let me now, together with Peter and Carlo, share with you some insights to confirm our ambition levels for organic growth in trading and clearing with Eurex, EEX, and 360T. Eurex has grown to be a EUR 1.1 billion business, it is truly global. We are the venue to trade index products with a global trading community and the place for the long end of the euro yield curve.
Again, this year, we see attractive growth rates of around 10%, mainly fueled by our good volumes in index derivatives, OTC clearing, and collateral income. As you can see here, our key secular drivers are product innovation, building on our strong, globally leading position in index products, and we'll continue to closely work with Sebastian and team for expansion. Our partnership program, which fuels volumes in OTC clearing. We have a strong pipeline for further growth and scaling up our offering and also building new ecosystems. We are focused also on expanding our value chain. We are happy to welcome Quantitative Brokers to the group, which are, for the first time for us, an electronic execution business. It's not only an attractive growth case in itself, but it's also a very synergetic expansion into the buy-side value chain for us. Let's turn to the equity index universe.
As I mentioned, product innovations underpin our global lead and drive our structural growth ambition in this segment. We have a highly attractive product pipeline. Actually, we are not just launching products, but we are building new market segments and ecosystems. Some of the examples you find here on this slide. MSCI is the leading global index suite, and Eurex has the largest share in open interest and also the broadest product portfolio. We will continue to scale our order book liquidity. We are focused on expanding our buy-side distribution and broadening our product portfolio. With total return futures, Eurex was an innovation leader delivering a showcase for futurization, addressing the need for margin efficiency and moving an entire OTC segment into listed derivatives. We have heard a lot about ESG, which is a nascent asset class.
Again, Eurex is a global leader with the largest product portfolio. We have already EUR 11 billion notional traded this year. We've just added further products, the EURO STOXX 50 ESG and the DAX 50 ESG futures. Of course, we have great expectations. We deliver the investment vehicles to the trends described earlier and will benefit from the sustainable investment and green finance trends. Lastly, fixed income. At fixed income, our successful partnership program drives our growth. Launched in 2018, the strong cooperation with our clients is the foundation for our success. Our offering is competitive. We have reduced the basis to zero, and spreads are at par with LCH. Our distribution now covers all major banks and institutional clients, and it continues to grow. Volumes have increased sixfold, and the market share now stands at 19%.
We will further benefit from the Brexit dynamics, but also from our unique USP of bringing together repo, swaps, and futures in one integrated CCP offering. I thank you for your attention. With that, let me hand over to Peter to cover the commodities.
Yeah, our next speaker today is Peter Reitz. Peter is the Chief Executive Officer of the European Energy Exchange, and he will present our opportunities in commodities. Peter, the floor is yours.
Thank you very much, Jan. As many of you know, EEX is the biggest power exchange in the world for a third year in a row, and power derivatives in Europe is our main business. Business has been growing significantly, mainly through winning market share from the OTC market. We not only provide derivatives, we have a unique combination of spot trading, so the very short end of the curve, and the derivatives, which makes this combined offering very attractive for both producers and industrial consumers. Next to our core markets in Europe, we have Nodal Exchange, our U.S.-based exchange, which holds more than 50% of the open interest in U.S. power and is entering the U.S. gas market and environmental markets.
Also in Asia, we are the number one trade exchange in global market share in terms of open interest, there's further potential growth for us as energy markets in Asia deregulate, like the recent example with Japanese power. Through all of these different initiatives, we will deliver secular growth above 5%, leading to a net revenue growth of 7%-10% over the next years. The next slides show how we can leverage our short- and long-term market position. In Europe, more than 75% of power derivatives trading is executed through EEX, but more than 50% is still OTC. There's still a lot of growth potential, even in our existing markets. The second element of that growth is regional growth. We now have more than 20 markets on our platform.
These are all of the European countries and the recent addition with Japan. Our core strength is connecting international clients with the local community of each of these markets, and through that, creating new liquidity pools and new trading opportunities for our customers. The fight against climate change is one of the key challenges of our time. Decarbonization is the key, like it was acknowledged in the Paris Agreement. The main instrument for that is cap and trade mechanisms that gives CO2 a price. We have significant experience, having run more than 2,000 auctions for the individual countries, collecting more than EUR 62 billion for those auctioneers. EEX has just been selected to be the auction platform for the EU for another five years. We've also won the tender in New Zealand with our partner, NZX, to run the auction markets there.
The growing share of renewables creates new opportunities both at the very short end of the curve. The intraday market is growing and has been growing significantly, also because of the lack of predictability for wind and solar power that creates the need to adjust positions. Also at the very long end of the curve, investors into new capacities of renewables are looking for standard products and increasingly benefit from, especially, our clearing offering. Also in the U.S., where Nodal Exchange is winning market share in the power market, 40% of the power in the U.S. market comes from gas. There's significant capital efficiency in putting gas and power in the same clearing house. Last but not least, our Asian offering, especially the recent addition of Japanese power, has big potential. Power consumption in the Japanese market is two times that of our biggest market, Germany.
The market maturity is still at a very early stage. With our experience and our international distribution, we can develop these markets, and through that, we can create, with organic initiatives and selected M&A, the growth for the next couple of years. Thank you very much.
Thank you, Peter. I'm handing over to our next speaker today, Carlo Kölzer. Carlo is the CEO of 360T, and Carlo will be presenting our opportunities in FX and adjacent businesses. Carlo, please.
Thank you, Jan. Ladies and gentlemen, good afternoon. I'm here today to inform you about DBG's FX business, as well as the new growth initiative that we are going to start very soon. It was exactly two years ago that I was informing you about the FX business last time in person, exactly that day when we announced the acquisition of GTX. Since then, we have integrated GTX within the group, and it has become a highly valuable part of our diversified value proposition in terms of customer base, product, and geographical focus. Within these two years, 360T and FX has managed to penetrate all the growth vectors that we were intending to follow consequently. With the effect that we are on a very robust double-digit growth trajectory based on organic growth and based on different growth vectors that I want to present to you in a minute.
Also, the market trends are still in our favor, like a growing market, a further level of electronification, a broader market maker landscape, alternative credit model requirements, and technological progress. The further development of 360T and the FX business of Deutsche Börse is based on five pillars, five vectors of growth. Number one, further extension into the other customer segments, in particular institutional space, asset management space. We have made great progress over the last two years. Additional product offerings, like the offering of an interbank swap platform that we call MidMatch. Similar endeavor is to do this for the NDF market. Further regional expansion, and particularly in Latin America as well as Asia-Pac. Also, the ETD initiative shows first traction and has made significant progress over the course of the last 15 months.
Also, obviously, based on this credit development, the development of the OTC FX clearing offering, which hopefully goes live in 2021. Overall, I can only say, the DBG's FX business in a very good and scalable position with huge growth potential that I just mentioned and ready to stay on this double-digit growth trajectory going forward in our Compass 2023. I would like now to follow up with the new initiative that we have started, which we call 360X. Thank you. 360X is a new platform for Deutsche Börse's growth into new asset classes. It's the goal to create and operate new marketplaces in new asset classes based on a very entrepreneurial approach to combine the best of two worlds, the scalability, the reputation, and the access of Deutsche Börse with an agile and entrepreneurial approach to build and incubate new businesses. This will go live very soon.
We are in the process of founding the platform as we speak. The first verticals will be focused on art and real estate, and based on a fashionable modular way, we will continue to explore the market and identify additional asset classes in order to create a completely new growth sector for Deutsche Börse, in order to create new marketplaces and nurture new revenues potential. With this, thank you very much for your attention. Bye.
Thank you, Carlo. Our next speaker today is Stephan Leithner. Stephan is Member of the Executive Board of Deutsche Börse and responsible for pre-trading and post-trading. Stephan will be talking about our opportunities in investment fund services. Stephan, please.
Thank you very much, Jan. When I today focus on IFS, let me still highlight upfront one sentence on Clearstream overall performance, which IFS is an integral part of. Against the odds of a very difficult interest rate environment, we will, on balance, achieve an aggregate growth because there's a strong custody and settlement fee revenue momentum that we have across the entire platform. Now, clearly within that, IFS stands out, and IFS has been successful under Roadmap 2020, and it will continue to be so. Under Roadmap 2020, IFS between 2017 and 2020 has grown by 18% per year.
The 15% under the current plan are something that we feel very comfortable, in particular because the last few years have already shown a 13% growth on an organic basis, and the 10% secular growth that we now have put into the context of the new Compass 2023, therefore, is very safely achievable. In particular, since the plan also includes continued M&A momentum. You see that the three acquisitions that we have already completed contribute 6% growth over the plan horizon. If I talk about Ausmaq in Australia, which has opened up the EUR 2 trillion market for us, it's clearly something which we now have fully integrated and a strong onboarding pipeline. The same is true for Swisscanto and UBS Fondcenter, the other two acquisitions, which are fully integrated, and the cross-selling is progressing very well.
As a last highlight, also for the plan, it's critical to also focus on the scaling. IFS continues to scale very well. Between the margin of 41% in 2017 and the margin for the first nine months of 2020, which in the range of 56%, you see the progression, and that will continue. How are we going to achieve that? First and foremost, IFS continues to be at the sweet spot of major industry trends, and it's very well-positioned by the work that was done over the last few years by Philippe Seyll and many of the colleagues in the business. Those main trends continue. The strong growth of the fund market, in particular in Asia above 10%. IFS is well-positioned in Asia and in Australia.
The entire expansion into alternatives and new asset classes, IFS has built already a number of years ago alternative capabilities in the fund space, ETF, as well as the entire ICSD platform integration has helped to cover the breadth of products. In the same way, the transition towards more independent distributors is really playing to the strong part of IFS, who has a network of 300 distributors that they're working with. Last but not least, our clients continue to be under enormous cost pressure. Outsourcing is in the order of the day, and we have proven that we can onboard these type of situations. More important, with UBS Fondcenter, we have started to show the strength of the partnership that we are able to execute and work together.
As we look ahead, it's not only in surfing these dramatic continued change waves, which we're well-positioned for, but I really see IFS as the centerpiece to a B2B ecosystem in the fund space. That's why it's not only about the continued optimization of our customer service, it's not only about the expansion of the front office distribution support, the UBS Fondcenter acquisition that we continue to develop, and where, as I say, more onboarding, more partnering, more M&A is possible. More important is also the third leg that you see on the left-hand side here on this chart, which is the expansion into the back end of the value chain. We have started to be transformative and disruptive to the share issuance in the fund space.
We have set up together with our technology colleagues and partners, together with asset managers and the Luxembourg Stock Exchange FundsDLT, which will bring distributed ledger technology to the fund space. As a fourth area of growth going forward, I do believe, and that is so exciting about ISS and being here today together with Gary, is the data opportunity, especially in the fund space, is a very powerful story to play, and having partners like the Simfund franchise and brand that ISS brings, just as much as very tangibly here in Germany, the FWW brands, will empower us to drive the growth on the data side in the fund space. If I look ahead, the vision is very clear. For ISS, it is the center of a B2B ecosystem, as I said. I think it will be more partnering and more M&A. We are open to our clients.
We really want to work with them, and we've shown that we can do this. Therefore, I'm very comfortable that the team will deliver the financial ambitions, the more than 10% organic secular growth, but on top of that, continued M&A momentum. Let me hand it back to you, Jan. Thank you.
Thank you. Before I introduce our final speaker today, let me just remind you, financial analysts and investors can already register questions via the Q&A tool, which you find below the video stream in front of you. I'm now handing over to Gregor Pottmeyer. Gregor is the Chief Financial Officer of Deutsche Börse, and he will present more of the financial details of our Compass 2023 plan. Gregor, over to you.
Yeah, it's a pleasure to be here. Let me start with a review of our achievements with regard to our Roadmap 2020 targets. We delivered what we promised. We fully reached our Roadmap 2020 financial targets. Net revenue grew by 9% CAGR, secular growth was more than 5%. Adjusted net profit grew by 12% CAGR, what is exactly in the range of our target of 10%-15%. Going forward, we want to simplify our reporting. Our income statement will be published on reported basis only. That means we will skip the reporting about adjusted numbers. Base year for important Compass KPIs will be 2019. Following our strategic focus, 3% KPI will reflect our profitable growth ambition. Net revenue growth, EBITDA growth, EPS growth. Now I come, you know it, to my favorite slide. We want to grow on our net revenue until 2023, with a 10% CAGR.
5% will come from secular growth, 5% from M&A. No cyclical tailwind on a net basis. Our secular growth ambition is based on a multitude of strategic initiatives. Starting in trading and clearing, roughly EUR 110 million will come from new exchange traded derivatives. That's MSCI derivatives, total return futures, dividend derivatives, ESG derivatives, ETF derivatives. Eurex will continue to grow market share and achieve a EUR 90 million net revenue growth for the next three years. 360T FX will contribute around EUR 70 million. Pricing, in the range of EUR 40 million in that range. That means roughly 1% out of our net revenue growth will come from pricing here. OTC interest rates swap clearing, EUR 35 million. Adding up to roughly EUR 55 million this year, would end in roughly EUR 90 million with a market share of 25%.
GFF, EUR 13 million, and buy-in agent, that's a new service we will offer beginning in 2020, will deliver with some EUR 25 million. In the post-trading business, IFS will contribute some EUR 100 million, custody EUR 90 million. In the pre-trading area, indices roughly EUR 60 million, analytics roughly EUR 40 million. From a cyclical perspective, I said on a net basis, it's neutral, but there are two different directions. One is NII, where we see a reduction of roughly EUR 130 million. In 2019, it was roughly EUR 190 million, and now we guide some EUR 60 million for the coming years here. Strong headwind, obviously. On the other hand side, we see a modest cyclical tailwind on the trading and clearing, what add ups over the four years to EUR 170 million. M&A will contribute roughly EUR 600 million. EUR 100 million was already closed deals, like Axioma, like UBS Fondcenter, like Quantitative Brokers.
ISS will contribute some EUR 300 million, including the secular growth of more than 5% and including synergies. We also include here future M&A in the range of roughly EUR 200 million, what we are confident to achieve over the next years. Our midterm secular net revenue growth opportunities are fully intact. All business segments will contribute to the growth strategy. Eurex is 7%-10%, more than 5% from a secular perspective. The acquisition of Quantitative Brokers adds another plus one percentage point. EEX, 7%-10%, more than 5% from a secular basis. 360T, more than 10%, roughly 10% from a secular basis. Our cash equity business, 0%-3% for the next years, so more a flattish development. Clearstream, 0%-3%. Here there are two opposite effects. One, the NII, I already explained.
On the other hand side, we see some 3%-5% secular growth in that business segment. Investment fund services, 10% on a secular basis, 6% from already executed M&A transaction. Qontigo, 10% secular growth, 5% via the acquisition of Axioma. ISS will contribute on Deutsche Börse Group level, roughly 2%, including the more than 5% secular growth. Again, what Orion mentioned, future M&A will contribute some 2% over the next years, so adding up to 5% M&A growth. We will continue to pursue our successful M&A agenda in the six areas Theodor already mentioned: index and analytics, ESG, commodity, FX, fixed income, and investment fund services. We will show capital discipline and have a clear financial framework for M&A. Transactions should be cash earnings accretive in year one, latest in year three.
Return on investment in year three should be higher than our WACC across the M&A portfolio, and our WACC today is roughly 6%. Margin dilution is accepted for transaction with strong strategic fit. As Gary already showed you, ISS is a very attractive growth business, which fits very well with our Compass 2023 financial targets. DB1 is acquiring a growing business with more than $218 million net revenues in 2020, more than a 5% CAGR opportunity pre synergies, more than 90% recurring revenue basis. In 2020, there was a 35% adjusted EBITDA margin, with obviously further operating leverage potential. We expect some EUR 15 million additional synergies in 2023 out of that transaction. ISS will be fully consolidated and forms a new segment within the pre-trading area. DB1 will hold roughly 80%. ISS management and Genstar Capital will hold 20% together.
Purchase price is $2,275 million for 100% cash debt-free basis. Deutsche Börse share of 80% is financed through roughly EUR 1 billion debt and the remainder with own cash. Transaction is cash earnings accretive in year one. It is roughly 5% based on run rate synergies. Transaction is expected to close in the first half year of 2021. We refine our financial steering logic to support our growth ambition. Operating costs at DB1 will be steered in line with secular growth we are targeting. In line with our simplified reporting, all-in operating costs will be the new cost metric. Continuous improvement, so we expect here roughly 2% productivity increase per annum, or roughly EUR 100 million by 2023, will be the key measure to capture efficiencies. We are planning with a broadly stable EBITDA margin on current high levels until 2023. Additional cyclical support would result in an EBITDA margin increase.
We confirm our longstanding capital management policy. We will keep our A A rating mainly because of the post-trading business, so that means net debt EBITDA below 1.75 x, FFO net debt above 50%. We confirm our dividend policy with a payout ratio between 40%-60% of net profit reported. With increased earnings, payout ratio is expected to decrease. Excess cash is preferably reinvested into the business to support M&A strategy, and we will maintain our sound balance sheet structure. The last slide of today's presentation summarizes the financial targets for 2023. Net revenue will grow by around 10% on average per annum. Secular growth will be 5%. M&A will deliver also 5%. EBITDA and EPS, on a reported basis, will also grow by around 10% on average per annum. Thanks for your attention. We are now looking forward to your questions. Back to you, Jan.
Thank you, Gregor. With this, we would now like to start the Q&A session. We will start from questions here in the audience and then turn to the analysts which are connected via video stream. In between, I will also read out some of the questions we have received from the chat system so far. The first question comes from Benjamin Goy from Deutsche Bank. Benjamin, the floor is yours.
Thank you very much, and good afternoon. Two questions, if I may, please. First, on the ISS acquisition. More than 5%, it's accretive to your group revenue growth you plan organically. Still, considering the vast opportunities you highlight in ESG and what we see from some competitors in the field, I wonder whether this could be higher. What would you need to see to call it high single digits or even double digits growth rate from this business going forward? Then the second question is, for this deal, I think you use a good amount or a large amount of your current financial firepower. Maybe an update on the current firepower. Is it around EUR 500 million left?
You add obviously over next year more, so call it, will you have a EUR 1 billion or even more than that for future deals in the near future? Should we expect a continuous focus on data and index as well as investment fund services for M&A? Thank you.
Thank you, Benjamin. For the first question, we would like to see whether we can reconnect to Gary, please. Gary, you're on. Gary, I think you're still on mute.
We don't hear you, Gary. Please unmute yourself if you have done so.
Does this work?
Yes.
Perfect.
Yes, it does. Thanks.
Great. Sorry. Apologies. Actually, the question broke up as it was coming through my video link. I got part of the second, but I didn't hear the first. At the risk of wasting a little time, if he could repeat the question, it would be really helpful because I can hear you now.
Yeah. Sure. Basically wondering, what would you need to see to be more confident than larger than 5% considering the ESG opportunity and what peers are reporting today?
Thank you. It's a question that we think about all the time, actually. We see tuck-in opportunities in the ESG space, and we actually see the growth of our businesses in double digits in ESG. Over time, our ESG business will continue to accelerate and grow, and that obviously will become a much larger part of ISS. ISS is between our organic growth initiatives in ESG and the tuck-in acquisitions, which are unpredictable, as you know. We have a very full pipeline today. We expect the rate to be significantly higher than 5% and solidly in double digits.
Thank you.
Thank you, Gary. The firepower question Gregor will take, please.
Benjamin, as you are aware, we had some EUR 2 billion firepower before of the ISS transaction. Yes, there are still some hundreds million EUR available. You are right. In addition, I would like to mention that we have a strong cash flow generating business, our cash will pick up very quickly. We are good positioned to continue to do further M&A, and that's obviously our ambition level. From a strategic perspective, we mentioned the six asset classes where we want to invest, and that's unchanged our focus.
If I may add, Gregor, it's not long ago when I got many questions from investors and analysts who were challenging me, what are you doing with the excess cash and the excess capital you're having, right? I felt a little bit under pressure because some people wanted to get their money back. Now I'm glad to hear that we're getting exactly the opposite question. I like it a lot, and I can assure you we'll be cash-generative very quickly, and it's also pretty clear we have said we will do another EUR 200 million revenue add-ons over the next couple of years, and I'm sure we'll have the funds available for this. Don't forget, we've got also some equity power, which we normally not talk about.
Thank you.
Thank you, Theodor. Before we move to the video stream of the analysts, I have one question in the chat system for you, Theodor, regarding the importance and readiness of larger deals. Could you please provide more color on your thoughts of larger deals beyond the recently announced ISS transaction?
Of course, I'm glad to hear that you guys pick up on this. If you look into the track record, what we have done over the last couple of years, it's very easy. We started with small add-on deals. We tested our capabilities and our skills to integrate companies. We developed a partnership model, and over time, over the last three years, we have increased the sophistication of our M&A deals and how we are integrating the deals. This whole partnership structure we are working with for the larger deals is obviously something we can build upon. On Axioma and on ISS, and I'm sure that Sebastian and Gary will agree to this. I think the fact that we are dealing with our partners like true partners is very important. It's very clear. We dare to go into larger deals.
We don't think it would be the right thing to do to go into transformational deals. Somehow in the EUR 1 billion-EUR 5 billion range, that's something what we are targeting. Again, I will not let myself or my dear exec colleagues get pressure. We will do whatever is strategically and financially compelling and comprehensive. That's what we are doing. It needs to be convincing at the end of the day. We are not doing M&A for the sake of it. I can assure you that our chairman of the supervisory board, Martin Jetter, is also very keen in order to challenge us that we are doing the right deals. You can be assured that our compensation system is fully aligned with the fact how we are doing M&A deals, not just M&A deals for the sake of it.
We need to do M&A deals, which are good M&A deals, and that is what we are promising.
Thank you, Theodor. I would now like to hand over to another question here in the audience, and hand over to Dirk Becker from Allianz Global Investors. Dirk?
Yeah. Good afternoon. Thank you for the presentation. I would have also two questions, please. The first would be on Borsa Italiana. I know this asset would not have been a good fit for you. When I look at your M&A criteria, it probably doesn't meet lots of those, but it would still have been strategic because you've now allowed Euronext to become the preeminent stock market operator on the European continent. They've been able to enlarge their value chain. My question is, would it not have been good for you to make a bit more of an effort to make it maybe more expensive or more difficult for Euronext to get to this asset? The second question would be on ISS. I think it changes a little bit the complexion of Deutsche Börse because it's a bit more labor-intensive than what you usually have.
It's a bit less operational leverage. In the future, this will be probably 20% of your employees for less than 10% of your revenue. I would just like to understand whether there's a chance that you can increase your operational leverage and make this more like a Deutsche Börse business as we know it. Thank you.
Thank you, Dirk. If I may, yeah?
Go ahead.
Right. On the Borsa Italiana. Dirk, to be very outspoken and clear, we have looked into it in parallel to our ISS deal. That's not a surprise. You can't do a deal like ISS overnight, and this all during hefty Corona times. Point number one. Point number two, indeed, we had been interested in the MFS side. It's a fixed income business, which would have been a great fit to us, but it's not a secret that would have created immediately antitrust issues on our side as well. Therefore, we have seen a clear risk associated on the MFS side, and therefore our proposal had been finally that we go into a minority position in the most attractive part of the business. Point number three or four is on the governance side.
We were not in a position and not willing to compromise ourselves in such a way what was expected there. Therefore, we were in the game. Whether it was an expensive asset at the end of the day and who was driving the price, it's not on me and us to judge. At the end of the day, I think Euronext did its conscious decision, and it's good, and we love competition. We will continue to work and to discuss together with others, including Stéphane Boujnah, and therefore it's fine for us. As you can see, I think it was difficult for us, and we have been hesitant at the beginning. Shall we enter the discussion or not? We were expecting that you guys are challenging us there. We have said in hindsight, in 10 or 15 years, you guys would have challenged us.
Why didn't we look into it even more? It's also pretty clear, I think, with the outcome now that we couldn't get Borsa Italiana but that we were successful with ISS, we are extremely happy. On the second question, Dirk, on the ISS side, yes, indeed. Yes, indeed. The structure of the business of ISS is slightly different than ours. At the end of the day, we have understood part of the family of ISS is the people which are employed in India and the Philippines. It's part of their business system. They are fully integrated. When we talked with Gary, it was from beginning on a very interesting scenario. Could it also be something which we can leverage on our side?
As I said before in my introductory statement, my first part of the presentation, you can be assured we are listening carefully to our partners, how they are doing it. I think I'm quite famous for when I see money on the street which can get picked up, I will go for it. Trust me, Dirk. Trust me.
Thank you, Theodor. We would now like to turn to the video stream and speak to Mike Werner from UBS for the first question from the video stream.
Can you hear me all right?
Yes, Mike, we can. Go ahead.
Excellent. Thank you. Two questions from me, both related to ISS. Again, thank you all. Thank you for the detailed information with regards to ISS. I was wondering if we could get a better understanding of how much the governance, the proxy part of the business generates from a revenue perspective and what that growth rate has been in the past couple of years. Second, we know there's a number of regulations coming into force in the EU, the EU disclosure rules, EU taxonomy, which is going to require much greater disclosure on ESG-related information. I was just wondering whether through Qontigo or through ISS or through a partnership, how Deutsche Börse can potentially benefit from those regulations coming on board. Thank you.
Thank you, Mike. Could we please switch to Gary? Gary, you're on. Did you follow the questions?
I did. This time they came through loud and clear, Jan.
Thank you.
Two questions. The first one, the governance business, also used to be known as the proxy business, is approximately 1/3 of our revenue. It has had incremental revenue growth over the last few years and continues to accelerate. I would say it's close to mid-single digits. It's in line with our revenue growth on a consolidated basis at ISS, and we're very pleased to see that accelerating revenue growth on that business. In terms of rules, ISS is used to working within regulatory regimes. We strive very hard to have strong relationships with our regulators. We are very supportive of those, and we think that those are true competitive advantages for us as well in how we manage to help both institutions as well as corporations meet their fiduciary obligations with regards to the rules that are being proposed.
We ourselves, as participants, also meet those rules. You will see most likely rules over time, particularly in the EU, targeting ESG. We feel very comfortable that we will be able to help asset managers and others, including obviously ISS itself, meet those obligations fairly quickly.
Thank you, Gary, and while we have you on, I have a further question regarding the ESG part of ISS and the growth rates you're expecting, and also a little bit in relation to the overall size of the market. Where you see yourself positioned, what the competitors are? If you could elaborate a little on that, please?
Sure. We view our ESG business as one of the top three global ESG businesses in the world today. We came from a fairly small place just a few years ago. Depending who you ask in the marketplace, and I'm not going to pass judgment on this, but I'll just give you factual information, we probably are number two or number three in terms of our ESG size of the business. Our business is accelerating. In terms of percentages, if we have time, I'm happy to dig in a little further, Jan. I don't know if that answered the question.
Thank you. I think it did very well. Thank you, Gary. We have another question from the video stream from Philip Middleton of Bank of America. Could we please switch to Philip? Philip Middleton, Bank of America?
Maybe the question was too difficult.
Maybe one to sort of a question in between regarding guidance. The question was on the existing parameters and excluding ISS, what should be the expectation for revenue and profit growth in 2021, so next year versus 2020? Gregor.
That's obviously a challenging question as we all do not have the crystal ball. In principle, we will give you more concrete guidance on 2021 when we have seen our preliminary financials in 2020, though that will be mid-February. In principle, I can already say today that we are focused on our secular net revenue growth, what is 5%. That target is true for 2021. From a cyclical perspective, obviously, you know that our Q1 was very strong, and so most probably that's not possible that we will beat that, or there will be strong headwind in the first quarter. In the quarter two, three, and four, we see obviously the chance to outperform that.
Our basic scenario is that beginning from Q2, we expect some economic recovery, so that a vaccine is available in the world, and so that the economic recovery would start, and that would obviously help to have some smaller cyclical positive impact in Q2, Q3, and Q4. With regard to the M&A perspective, what is the contribution here? We already know more than EUR 50 million for next year out of the transaction from UBS Fondc enter on Quantitative Brokers. Obviously, ISS is then the question, when are we able to close that in the first half year? The earlier, obviously, the more. There will be in 2021 a significantly impact out of that kind of M&A transaction. Overall, that's from a revenue perspective.
From a cost perspective, as Theodor already mentioned, we have contingency plans in our drawer where we are able to react if we would see more headwind compared to what we expect today.
Thank you, Gregor. Could we please try to switch to the video again and Philip Middleton, Bank of America?
Any better?
Philip?
Can you hear me?
Yes, go ahead please.
Yes. Can you hear me? Good. There we are. Thank you very much to your colleague for arranging all this as well. She was very zealous, and we appreciate it. Two things quickly. First of all, what is the logic for keeping 20% minority stakes in acquisitions? How does that help you merge that business with other businesses in the group? How does that help you drive revenue synergies? Also in this specific example, how does the fact you've got different minorities in ISS and Qontigo help those two businesses work together? Also you've not actually talked about T2S at all in this presentation. I just wondered if you had any updates there. If not, then that's fair enough. Though it would be interesting to hear about that too.
Theodor, do you want to start with the approach to minorities, please?
Great. Let me kick off and then maybe Stephan may add on additional color. On the 20% minority, what is the governing thought on our side, Philip? Firstly, we say it is very important and highly welcomed if there is a senior management team who is willing to invest in our joint businesses. The willingness to roll money, own money, of the senior management team is an asset in itself because we know that this will drive the future success of companies. Secondly, having a private equity sponsor working together with us is normally also a strong driver for discipline, execution discipline, future growth and operational excellence. These are the two major principles.
On the UBS Fondc enter side, it's good to have the client with the third-party business, to have the client with the biggest part of the business on board, therefore it's always a clear rationale behind it on the minority side. It is not a must that we go into the minority positions, if we can structure it in a smart way, we are willing in doing so. Stephan?
Thank you. Stephan. The question on the Investor CSD and T2S, please.
Very happy to give an update. As I stated at the beginning in my few remarks around Clearstream more broadly. The headwinds from the Net Interest Income have offset and hidden in, if you want, a very continued good growth on the basic custody and settlement fee side, therefore also our Investor CSD offering, which has seen a 6% growth. We have by now, in just these days, passed 15 trillion of assets under custody. I think that's a hallmark. If you go back, we started at 13.6 in 2018. Therefore, that momentum is there. With respect to the comprehensiveness of the product, in the next few weeks, Spain and Portugal are going to be added. I think we truly can say that the core countries of Europe are now on stream in terms of the Investor CSD offering.
Thank you, Stephan. We would now like to change to Bruce Hamilton in the video stream. Bruce Hamilton from Morgan Stanley, please. We see you, Bruce. We can't hear you. Nope. Let's maybe try another one quickly. Gurjit Kambo from JP Morgan. Is Gurjit on? Gurjit Kambo from JP Morgan? Gurjit?
I am on. Don't know if you can hear me there.
Yeah. If you speak up a little, then we also hear you.
Hi. Can you hear me now on the?
Yes.
Gurjit Kambo from JP Morgan. Is Gurjit on?
Yeah. Can you hear me?
Yes, we can. Please go ahead.
Great. I just got a few questions. Firstly, I don't know if you answered this already, but in terms of the revenue growth from ISS of around 5%, just in terms of the different businesses, how do you think about growth there, in terms of [crosstalk] ESG? Is there sort of different growth profiles in those three businesses? That's the first question. The second, just on Qontigo. Given the 15% growth in revenues, how should we think about cost development, because you're looking to innovate product? Is there going to be a lot of cost saving coming through as well on Qontigo? Those are the two questions.
Thank you, Gurjit. Maybe we'll try to go to Sebastian Ceria of Qontigo, to address the question regarding the relationship between revenue growth and cost growth. Sebastian, can you hear us?
Yes, perfectly. Thank you. Thanks, Gurjit, for that question. From our perspective, the way we look at this is that we need to have revenue growth because revenue growth is behind the thesis of Qontigo and, of course, given the market opportunity. In order to achieve that revenue growth, of course, we have to invest in the business. At this stage, what we're thinking is that is going to start. Right now it has been going more or less in lockstep, but on an ongoing basis, we're going to start seeing a slight decrease in the growth rates for costs and a little bit of an increase in the growth rates for revenues, which will help us a bit expand our margins. That's going to be just a function of the operational leverage that we're going to get.
Of course, the synergies that we promised, let's not forget that unlike ISS, where it was just one company coming in this case, we also had to integrate STOXX and Axioma. In order to do that, we are going to get operational leverage that comes from that integration.
Thank you, Sebastian. The first question was addressed to Gary. I think you touched upon a little on that already, but maybe you could elaborate a little bit more on the differentiations of growth rates between the different segments as part of ISS. Gary?
Thank you, Jan. ISS is comprised essentially of five business units, and going quickly through them. The first one is the Governance business, the second one is the ESG business, the third one is the Market Intelligence, fourth is Corporate Solutions, and fifth is Media. We think of them holistically, actually, when we make investments for growth. Our targets are around 5% growth rate that Theodor mentioned before. If you try to break it down, you will see that our Governance business, and our Corporate Solutions business are in the mid-single-digits range, and we expect that consistency to continue. If you look at our ESG business, we see that as a double-digit growth. If you look at our MI business, that business is in the midst, essentially, of an investment program, because we are refocusing it. I would say that our target is low-single-digits.
Our media business is highly dependent on the COVID environment. You might see significant growth of that business next year if a vaccine is in place and we all get back to travel and conferences. Maybe that gives you a little bit of a flavor of the growth, but it all essentially currently it's been adding up to a 5% revenue growth. Hope that clarifies.
Thank you, Gary. One question from the chat system here is more regarding cyclicality. What if the volatility doesn't pick up, how will we be able to compensate for the lower NIIs? I think this goes a little bit into the contingency plans we've mentioned. Gregor?
Obviously, this lower NII, so in the Clearstream segment, so I told you that Clearstream overall is targeting for a 3%-5% secular growth. That already compensates some of the reductions we see on an NII side. On a Deutsche Börse Group perspective, if we would see strong cyclical headwind for the full year 2021, then we are able to react. It's by far not our base case, that's why we call it contingency plan, and it's very concrete, the contingency plans we have here. We would be able to react, but the cost increase would not be the way as we planned for. We would be able to have some close to flattish costs on a constant basis if there would be the need to.
Thank you, Gregor. Could we now please switch to the video stream again? First, the questions of Arnaud Giblat from Exane. After Arnaud, we would like to switch to Johannes Thormann from HSBC, please. First, Arnaud Giblat from Exane.
Hi. Afternoon. Can you hear me?
Yes, go ahead, Arnaud.
Yeah, great. I've got three quick questions, please. On ISS, there's a 20% minority stake that remains. I'm wondering if there's a put option for private equity to exit. Clearly, they have to have an exit at some point. I'm wondering what that is. Secondly, on your use of reported earnings as a reference base rather than adjusted earnings, clearly, we've been proponents of this. I'm just wondering what has made you make that change? Thirdly, EEX. I'm wondering if you could comment a bit more about the slowdown in volumes we've seen in 2020, what that's down to. I think it's lower electricity price consumption, but I'd like to hear it from the horse's mouth. Also what you see in terms of the outlook on volatility of electricity prices given the structural changes to electricity markets. Thank you.
Gregor will start, and then after that, we'll switch to Peter Reitz of EEX, please.
Yes. With regard to the reference of our reporting changes. Arnaud, I think you were one of the guys who told us that the adjusted number is not the perfect number, that we should focus on the reported number. We take this feedback obviously seriously, and so that's also the reason, on the one hand side, that kind of criticism we got. On the other hand side, it's also a simplification of our reporting if you have just one number set on a reported basis. The reasons out of simplification also was the main trigger to do exactly that way. With regard to the first question of the put options, yes, there are put options in place, also for the management, also for the PEs of Genstar.
Thank you, Gregor. Could we now please switch to Peter and the question on EEX and the volume development in 2020? Peter.
Yes. Thank you for the question. The answer is pretty simple this time. The volumes that we've seen in 2020 have been largely driven by the direct impact of the COVID crisis. We've seen significant growth in March and April, in particular, as volatility picked up and people needed to adjust their positions. The overall impact of this crisis was that the power demand has dropped, and we've seen the outcome of this through May till August. In the last 2.5 months, September, October, volumes have picked up, and so has revenue. This is directly related. Overall, this is still very much driven by the development of the COVID crisis itself. That will continue also into next year, depending on how that crisis will develop, whether we will face another shutdown, which obviously will reduce power demand again.
The outlook for volatility is almost impossible to predict because it will be directly related to the COVID scenario.
Thank you, Peter. Could we now please switch to Johannes Thormann of HSBC, please? Johannes, the floor is yours.
Hello, everybody. Johannes from HSBC. Three questions, if I may. First of all, on your 10% revenue and 10% growth target, could you explain why you don't shoot for operational leverage anymore? Normally, you would have targeted positive jaws in this. Can you help me understand this. Secondly, just if you could provide some more details on the financing of the ISS deal in terms of the bond. Do you have a certain duration? Might you want to repay quickly or rather use the cheap rates lower for longer for 10 years or so? Could you explain this? Last but not least, what drove your decision to target 5% M&A-driven revenue growth as you never guided for M&A growth before, although now market prices are far higher and probably contain bigger risks in those deals? Thank you.
Yeah, thanks, Johannes, for your questions. Yes, there is a change. We say it's 10% top line growth and it's 10% bottom line growth. We also said 5% of this 10% revenue growth comes from M&A. You see that the margins of that asset we acquired is lower than Deutsche Börse has today overall. That means if we do 50% of our growth from M&A and that's below the current margin level, that means the existing business, there you will see an operative leverage. That's why we do not change that principle for the existing business. The assumption here is also that from a cyclical perspective, we will get some tailwind over the next two to three years, and that gives us flexibility and opportunity also to show leverage from today's existing business.
Second question with regard to the funding of ISS bonds. Yes, the intention is, overall, we want to fund roughly EUR 1 billion, roughly half of it in U.S. dollar, half of it in euro, most probably, and also on a longer term basis. That's our understanding. If you look on our maturity profile from our bonds, every year, basically, there is a replacement so that we could also react to reduce the leverage when we have created enough cash out of our cash flow generative business. The third question with regard to why do we pick now 5% M&A growth. You have seen in the past we did roughly some 2% of M&A growth. Now we did this ISS transaction, what is obviously a bigger one than we did in the past.
This shows you that our M&A ambition level is more credible and it's clear the management focus to continue to diversify our business, specifically in the area of more recurring revenue, so specifically in ESG data analytics and so on. That is our core conviction, and that this is also the right way. Overall, we have more confidence that we are able, and we are prepared now to do more M&A. From organizational perspective, we increased our capabilities here, and it's the clear understanding of Deutsche Börse management to go that path, organic and inorganic growth.
Thank you, Gregor. Could we turn to Haley Tam from Credit Suisse now, please, on the video stream? Haley Tam.
Hi there. Can you hear me okay?
Yes, Haley, go ahead, please.
Fantastic. Okay, two questions from me, please. First of all, if I can ask you about M&A again and the information that you put down on slide 36. Looking at that and the sums of the columns on that slide, my interpretation is that your main focus for further M&A would be Eurex and EEX. I just wondered if you can confirm that that's the case, and perhaps make any remarks there. The second question is actually very specifically about Eurex clearing. I just wondered on Gregor's favorite slide where he breaks down the pathway. Oh, sorry, I've lost the slide number now.
35.
Slide 35. Can you confirm if the EUR 35 million growth that you expect to see from OTC interest rate swaps, does that include any incremental growth from the European Commission's encouragement to people to reduce their excessive reliance on U.K. CCPs? Thank you.
Okay. Yes, sure. These OTC interest rates, starting with the second question. This additional EUR 35 million is based on the current environment. Today we achieved some 19% market share, and we are confident to continue to grow that in the range of 25%. That helps with the growing market overall, to increase our net revenues from this year, roughly EUR 55 million to close to EUR 90 million in 2023. Here is not included a potential Brexit scenario where European Commission and ECB would consider, in case there's final no agreement between EU and U.K., these institutions would consider to reallocate business to Europe. That is not part of our business case, that is basically an option on top of that and is not included in our plan here. With regard to your first questions.
Yes, you do not see in our plan here M&A transaction in the Eurex, EEX, and 360T FX part. As you have seen in these six asset classes, what we defined, all of these areas are clearly of high interest for Deutsche Börse. Therefore, we are looking also intensively in these areas, what kind of M&A is possible. We do not exclude it to the areas where we did already M&A transaction, like investment fund services, like now ISS and Qontigo. We are also in the other areas, much interested to do M&A. We are open in all of these six assets classes we mentioned.
Thank you, Gregor. Could we now turn to the question of Andrew Coombs of Citi, please? Andrew Coombs? Andrew, are you on? Can we have any alternative analyst, please? All right. It seems there is a technical issue. Maybe we are moving on with a question out of the chat system regarding the key KPIs that we've mentioned, so revenue growth, EBITDA, and earnings per share. The question was, given that how important M&A is for our strategy, why we don't look at any return metrics?
As you have seen in my presentation, we have a clear financial framework, and that includes two KPIs. One is that it's already cash earnings accretive in the first year, so that's obviously perfectly covered by earnings per share. The second KPI is return on investment, where I told you that across the portfolio, we should be in line or above our current WACC, and our WACC is currently 6%. From an M&A perspective, we have this clear KPI in our mindset. Overall, for Deutsche Börse Group, this KPI doesn't make sense to follow up as return on equity or something like that, because in all our trading areas, we are not regulated. We do not need a certain amount of equity.
Focus on M&A side, yes, we have both KPIs, return on investment and earnings per share, on our agenda, and we show capital discipline across the framework I told you.
Thank you, Gregor. We would now like to try Andrew Coombs again of Citi. Andrew, the floor is yours.
Finally, you can hear me this time.
Yes. Excellent.
Thank you for taking my question. Actually three, if possible. The first of which would just be on what you are projecting for future M&A in your EBITDA progression number. You've kindly given the incremental EUR 200 million for future M&A revenues. I assume you've embedded an EBITDA margin assumption on that for your 10% EBITDA growth. If you could just clarify there, are you using 35% similar to ISS? Actually, to clarify. Second question is a much broader question. If I look at the revenue building blocks, previously you were guiding to greater than 10% revenue growth from Eurex and EEX. Admittedly, that was cyclical and secular. When I look back at the previous investor days. Now you're guiding to about 5% just from secular. Can you elaborate?
Is that just purely because there's no longer a cyclical element embedded there, or is there actually a lower secular growth rate that you envisage from here? Then the final and last question. You talk about 90% of ISS revenues being recurring. Please can you elaborate on exactly how the charging structure works there? I assume it's a subscription-based model. Thank you.
Okay, maybe I take the first two question, then Gary can comment on the third question with regard to the recurring ISS revenue level. For future M&A, so we told you that most probably, the EBITDA margin of the acquired assets will be below of the level of Deutsche Börse Group. It really depends on the acquisition we do. With regard to UBS Fondc enter, that even a higher margin, it's 70%, what we acquired here, but is above the average of Deutsche Börse. Now with ISS, we guided you and said it's roughly 35% on an adjusted basis, but also with some operational leverage scaling aspect. Overall, we don't want specifically guide what is now our future EBITDA margin in the targets, because they could be very different.
You see here 35% on the one hand side, 70% on the other hand side, and it really depends in which area we do which deals. If we would do more in the investment fund service area, most probably there are higher margins compared to the data analytics, which would be closer to the ISS margin. Your second question, with regard to trading area, cyclical and secular opportunities. You see on my favorite slide again that we assume some cyclical upside in the trading and also in the clearing and post-trading business. That's EUR 170 million you see here. That's in the range of 1%-2%, roughly on average, for the next years. There is some cyclicality here included.
We just say on a net basis, it's neutral because we have this headwind with regard to NII at Clearstream, but this will be slightly overcompensated by the expected tailwind we expect for the trading business. Third question to Gary?
Yeah. Thank you. Gary, do you want to elaborate a little on the revenue generation at ISS and the fee models, the recurring nature, please?
Thank you. Jan, can you hear me?
Yes, we can.
Okay, wonderful. Yes. As previously stated, our business is approximately 90% recurring, and a good chunk of the remainder is what we call reoccurring. The short answer to the question is that yes, they are subscription businesses. Subscriptions range between one and several years. As part of those subscription businesses, in many instances, sometimes we have what we call one-time revenue that comes out of it as well, but it is part of a subscription. Generally, you should think of them as subscription businesses.
Thank you, Gary. We have two final questions for today from the video stream. The first one is Bruce Hamilton. I think we have an audio now. Bruce?
Hi there. Yeah, can you hear me?
Yes. Excellent.
Brilliant. Okay, cool. Just two questions, one on FX positioning and one on deals. In terms of your FX business, I guess I was keen just to understand how far you think we're through the kind of shift from OTC to exchange. I think on EEX you said about 50% of the way there. How much is there further to go? In terms of things like futurization and central clearing, I get the impression talking to other people that CME are further advanced in futurization and the appetite for clearing, given we've just been through a crisis period, actually the credit risk hasn't really emerged. How strong is that theme and how is your positioning very different in futurization to the CME?
Finally, I guess, do you think you have all the building blocks to succeed in FX or is there anything you would look to add inorganically? That leads on to the question on deals. I guess, given you're now at 1.75 x net debt EBITDA, your peers obviously have shown that they're willing to go well beyond the long-term sort of debt capacity to do strategic deals. If there's a good deal comes along, would you be willing to go say 2.5 x with a view to paying down over 12, 18 months? Do you take a different view to the likes of Euronext and LSE? Back to Haley's point
When you look at the opportunity set from here, is it still more in the ISS and data area? You see a fragmented pool of assets that you could buy, or is there a broader set of opportunities in the other areas?
Thank you, Bruce. Carlo will take the first question, please. Carlo?
I took three parts. Number one, do we have all the components in place to compete as a diversified offering? Number two, is futurization really coming to the extent that is anticipated, and what's our differentiating factor to the CME? Number three, is futurization in general still a theme despite some developments or that didn't come on the clearing side? Number one, I think this is our strength, and it has also shown through the crisis that we are very diversified on the OTC side as well as on the future side. On the OTC side, we cater different customer segments, the asset management segment, the corporate segment, as well as the market taker banks or hybrid bank sector. This helped us a lot. We are benefiting from volatility when it comes, but when it's not there, we still have a constant growth.
I also want to add, over the last two years, we added 400 new customers at literally no churn, lower than 1%. That explains our secular growth in all different segments and activities. Volatile spot business, not so volatile swap business, and a mix of all. This is different geographies, whereby lockdowns in India have hit us, whereby activity somewhere else was higher. The diversification on the OTC side is one of our winning factors, and this at scale. The addition to the futures already has shown additional revenues this year, which adds to our diversification. Our plan was to make about EUR 1 million with this. We come close to this, probably. The tendency increasing. The question, is it coming more or not? Yes, it's coming more. It doesn't replace necessarily OTC.
It partly comes in addition, because now the market similar like in equity, have an ability without physical settlement to do hedges on the listed derivative side, which leads to overall increased activity. In comparison to the CME offering, we see that in certain currency couples, we already have better spreads in big parts of the day. The liquidity is there. We also have some innovative offering, like the rolling spot future, which doesn't exist on the CME side. The composition there is different. There are days where we already have in certain currency couple, 10%-20% of the market share of the CME tendency increasing, and we're increasing the variety of currency couples and introducing options over the course of next year. Listed options as well. The last question, is futurization and clearing still the name of the game? Yes, it is.
Some regulators have a bit pulled back on the push on clearing requirements. We haven't seen that for the cross-currency swap for some reason, not yet at all. I think the proof is still out here that this might come over the course of the next couple of years, and we are well prepared for this. I assume that credit mitigation through clearing will be a significant part of the credit mitigation path going forward, which is also documented by articles from certain banks, which are big in the PB space today and want to reduce their risk in that area. Does that answer your questions?
Thank you, Carlo. The question on M&A goes to Theodor, please.
Yeah, Bruce, thanks for the question from my side. Let me try to differentiate our business a little bit more, all right, with regards to M&A agenda. Firstly, we've got a fixed income business where we are pretty much lagging behind, and there, I'm willing, I think everybody in the ExCo is willing to pay a strategic premium if necessary in order to fill the gap. Point number one. Point number two, on EEX, we are a big player. We are top player globally. We see each and every deal, right? We will continue to act as we have done in the past, potentially rather small and mid-size deals than bigger ones, because we immediately run into antitrust issues. There is a certain exception there, and that is the field of the adjacent businesses on the commodity side. Currently, we do predominantly power and gas, right?
Of course, carbonization is a big topic there. On the foreign exchange side, Carlo's business, right, it's very clear. We are determined to grow and organically, unfortunately, the space of available targets is fairly limited, right? We cannot change this. Therefore, we will further grow this business organically, and you have seen with the acquisition of GTX some two years ago, which works out very nicely, right? The numbers what we are producing this year, it's a good starting point. On EEX side, we need to have tangible assets in front of us, and then we will look into it on the M&A side. On IFS, I've always said, and I can reiterate, that we are willing to look at each and every situation where our IT platform, Vestima, fits. There we'll do deals.
We are globally a super player, EUR 2.800 billion, EUR 2.8 trillion of assets under custody there. This is always a field where we look into it. Of course, we have to differentiate where do we have anti- trust issues? What can we do further? This is the normal course of business, what we are doing there. ESG, I don't need to repeat what we've said before. ESG, we've done a big acquisition now. ESG is a field where Gary, where also Sebastian, will look into it and we as a group, this is on the radar screen as well. What is left then is data and analytics. Data and analytics, I've always said, we are not interested in the old-fashioned data businesses with end terminals and this kind of stuff. We are predominantly interested in the analytics part of the data business.
We are predominantly interested in business which create high recurring revenues. We are predominantly interested in businesses which fit together with Qontigo now, newly with ISS. With our value chain. That is the situation, how we look at it. As you have seen, we have opened up now the door for ESG. I can tell you, if over the course of the next three years, ladies and gentlemen, another asset class will pop up. Compass 2023 is like a true north, the needle. It shows us where we want to go, and we are happy to open up this. If there is a new asset class popping up, we will do. We have not discussed today about asset classes which can be tokenized in the future. We have not talked about asset classes which are driven predominantly by the technology side. We've got Christoph Böhm sitting here.
I think we need to be flexible simply to do there. We have not talked about all the venture investments we have done. Which is good. We are spending a little bit of money there, not too much, but very focused money, which is very well perceived, and we learn a lot from these kind of investments. This gives you the framing of the overall situation on the M&A side.
Thank you, Theodor. Could we now have the question of Martin Price from Jefferies, please? Martin.
Good afternoon. Just had a quick final question on ISS. I was wondering what gives you confidence that there are no risks of client attrition or perhaps enhanced regulatory scrutiny of the deal, given possible perceived conflicts of interest resulting from ownership of the governance, proxy advisory, broader advisory businesses alongside listings and the index services business. Thank you.
Yeah. That's a question also for Gary, please, regarding the independence of your governance research. Gary, are you on?
I'm on, Jan. Thank you. Can you hear me?
Yes, go ahead.
Great. I think I caught most of the question. It kind of faded at the end. If the question has to do with the conflicts of interest policies, ISS has been and has had this structure of businesses for many, many years, and we have worked very closely with regulators and, of course, with clients. Our clients are generally extremely comfortable with how we run things. We have very robust firewalls between the businesses. They operate separately. Our research is generated at arm's length. Our clients clearly know that. We get diligence by the largest financial institutions in the world on a recurring basis, sometimes an annual basis. We provide a number of compliance reports to them upon request. We're very comfortable with our business model, and we don't think this transaction at all impacts that part of our business.
Actually, any part of our business in terms of potential client attrition. We have been through a number of transitions over the years, and we have been quite successful in maintaining and retaining the client relationships. I think there is a significant amount of trust and credibility that has been built over the years, and I expect that to continue in the future. Thank you, Jan.
Thank you, Gary. We still have very few questions in the pipeline, but, given that we already slightly exceeded our time today, I apologize and would like to hand over to Theodor for closing remarks. Thank you.
Yes, ladies and gentlemen, thank you for this, as I think, quite lively discussion. Thank you for joining today's Investor Day. Let me conclude with a couple of final remarks. Firstly, bear in mind, originally we had planned to conduct our Investor Day or our Capital Markets Day end of May. I can share with you openly and transparently, we had developed our strategy prior to the originally planned Capital Markets Day. We presented our strategy to the Supervisory Board, where we had discussed it in a strategic committee in the overall governance body. Then we decided to postpone the Investor Day till November, till today. I can share with you that we really went through carefully and thoroughly. We went through, can we really achieve the secular growth? Is Corona, is COVID-19 a driving force which changes fundamentally our businesses?
We came to the conclusion, this is not the case. Our business segment heads were involved in this. This is not just a Gregor, Theodor, Stephan, Thomas, Christoph, Heike type of stuff. We asked our business segment heads who have a huge degree of freedom, including Sebastian. In future, Gary. We've asked them, "What is your view on the secular growth?" They came back and confirmed the discount coming from the COVID is fairly limited. On the cyclicality side, we have factored in the changes of the NII, especially coming from the U.S. rate cuts. That's what we have factored in, and therefore, we changed some assumptions we originally had on the cyclicality side. On the M&A side, it's very clear. We simply said, we can do roughly 2% CAGR. We demonstrated 2% CAGR over the last three years, excluding ISS.
We said, given the pipeline, given where we are working on, where we see the ideas, where we have started conversations, we think we can be a little bit more bold, and that made us being comfortable to share with you for the first time guidance on the M&A side. As you have seen, we didn't overpromise. We want to rather overdeliver. I do think we have developed a fairly good financial plan. It is solid. The strategic basis is very good because if you look into the strategic direction and the fundamentals where we can work on, these are very strong. We continue to be very transparent with you. We are not famous for allowing surprises in last minute. That's normally not the case. Of course, nobody can exclude any kind of black swan events.
That is the reasoning, and we shared this openly with our Supervisory Board, with our Strategy Committee, with our Chairman of the Supervisory Board. We discussed. Of course, things can happen. Therefore, we baked in consciously this contingency plan, and hopefully we never need to rely on it. Thank you for your attention today. Stay healthy and see you soon.