Stephen Yiu, manager of the Blue Whale Growth fund, has announced he is divesting his stake in the London Stock Exchange Group (LSEG), citing frustration with the company’s recent performance and strategic direction. Yiu, a respected investor managing approximately £3 billion in assets, disclosed his decision amid concerns over LSEG’s ability to capitalize on technological advancements, particularly in artificial intelligence.

Yiu had anticipated that LSEG, a FTSE 100 firm, would emerge as a beneficiary of the AI revolution. However, he described the company’s recent developments as “very disappointing” and suggested that the management team appeared distracted. While Blue Whale’s holding in the group was relatively small and outside LSEG’s top 100 shareholders, Yiu’s critique carries weight given his strong track record. Since its launch in September 2017, Blue Whale Growth has appreciated by 327 percent, substantially outperforming its benchmark’s 127.2 percent rise through the end of August.

Under the leadership of Chief Executive David Schwimmer, who joined in 2018, LSEG has undergone significant transformation, most notably with the $27 billion acquisition of financial data provider Refinitiv in 2019. This move aimed to position LSEG as a leading data and analytics provider in the financial services sector. LSEG’s shares reached a peak of around £121 in February 2025, fueled by market optimism about the company’s role in enabling AI developments through its large and proprietary real-time data sets.

However, investor sentiment has shifted as concerns grew that AI could undermine parts of LSEG’s existing business model. Although the company maintains that its data assets are increasingly valuable as inputs for AI systems, its share price has declined by 3.1 percent over the past year to about £84.74. In response to pressure from Elliott Management, an activist American hedge fund, LSEG announced a £3 billion share buyback in February aimed at bolstering its stock market valuation.

Yiu criticized the buyback, labeling it "financial engineering" that merely postponed addressing deeper issues. He questioned whether the group’s broad conglomerate structure—with holdings including the London Stock Exchange itself, the FTSE Russell indices unit, and a majority stake in US-listed Tradeweb—was dividing management’s focus. While he acknowledged Schwimmer’s acquisition of Refinitiv as a smart move, Yiu expressed doubts about subsequent benefits to shareholders, suggesting a lack of clear progress.

Additionally, Yiu hinted that LSEG might benefit from new leadership at the board level, proposing that a new chairman could offer fresh perspectives. Don Robert, who has served as LSEG’s chairman since 2019, remains in his role. LSEG did not provide a comment on Yiu’s statements.