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She agreed to the largest deal in the company’s history; ‘I tend to take a competitive approach to life’

She’s a second-degree black belt in taekwondo. She’s a ferocious pickleball player. And she plays hard when urging companies to list at Nasdaq rather than her nemesis downtown, the New York Stock Exchange.

“I tend to take a competitive approach to life,” Adena Friedman, the 53-year-old chief executive of Nasdaq, said in an interview this week.

Friedman now faces perhaps the biggest challenge of her career. Nasdaq said on Monday that it had agreed to buy software maker Adenza for $10.5 billion—the largest deal in her company’s history. If completed, it would crystallize Friedman’s vision of transforming Nasdaq into a financial-technology company, moving it far beyond its roots as a stock exchange.

Nasdaq shares tumbled on news of the cash-and-stock deal and remain nearly 10% below their price prior to the announcement. The onus is on Friedman to close the transaction, integrate Adenza into Nasdaq, and show that the steep price tag was worth it.

Even as the Adenza deal was coming together, Friedman was pouring her energy into another critical effort: Nasdaq’s bid to win the initial public offering of British chip designer Arm, which is likely to be the biggest IPO in an otherwise quiet year for listings.

In February, she flew to Japan to meet Masayoshi Son, the CEO of SoftBank Group, Arm’s parent company, and she later courted Arm management in a series of Zoom meetings, people familiar with the matter said. Her message, the people said, was that winning Arm was very important for Nasdaq.

Nasdaq and the larger NYSE compete for all major IPOs, and they often entice companies with marketing packages that include advertising time, lavish IPO parties and other perks. Nasdaq offered Arm a package valued at $50 million, which includes giving the chip maker access to Nasdaq-hosted events organized around the World Economic Forum in Davos, the people said.

The gambit worked. Arm plans to go public on Nasdaq in the coming months, the people said.

Its debut may help Friedman maintain her recent winning streak: For four straight years from 2019 to 2022, IPOs at Nasdaq raised more capital than IPOs at the NYSE, Dealogic data shows, although the two-century-old NYSE was long the dominant U.S. stock exchange.

Friedman is the mother of two sons in their 20s. She is married to a retired lawyer who teaches pottery. They live in Maryland, and Friedman commutes to New York during the week while spending weekends at home.

Since the pandemic, Friedman hasn’t spent as much time on taekwondo. But she’s taken up pickleball and she works out on her Peloton nearly every day, Friedman said in the interview. (The maker of her fitness device, Peloton Interactive, went public on Nasdaq in 2019.)

Friedman has gotten Nasdaq embroiled in controversy over hot-button social issues.

In December 2020, Nasdaq proposed a new rule requiring its listed companies to meet minimum diversity targets for their boards or explain in writing why they weren’t doing so.

For most companies, the targets are to have one female director and one director who is a racial minority or who self-identifies as lesbian, gay, bisexual, transgender or queer.

Democratic politicians and much of corporate America applauded the plan, while conservatives blasted it as a thinly disguised quota. “We do not think Nasdaq should be using its quasi-regulatory authority to impose social policies,” a dozen Republican senators said in a February 2021 letter to the Securities and Exchange Commission, urging the agency to use its authority to block the rule.

Friedman said the rule was aimed at fostering transparency into how companies think about diversity. A divided SEC approved the rule in August 2021. Last year, Nasdaq began requiring companies to disclose diversity statistics about their boards under a related rule, and the diversity targets are set to take effect in phases starting later this year. Two right-leaning groups have filed a court challenge to block the plan, which may ultimately reach the Supreme Court.

Raised in Baltimore, Friedman had deep connections to finance. Her father, David Testa, was a longtime employee of T. Rowe Price Group who became the firm’s chief investment officer before retiring, and Friedman visited the T. Rowe trading floor as a child.

Friedman’s career at Nasdaq began almost exactly 30 years ago, on June 1, 1993, when she started as an intern. Fresh out of business school at Vanderbilt University, she started out writing product plans for arcane projects in Nasdaq’s trading division.

She rose through the ranks as Nasdaq became a listing destination for hot tech companies in the dot-com era, branding itself the “stock market for the next 100 years.” After Robert Greifeld became CEO of Nasdaq in 2003, Friedman worked closely with him on a series of deals that expanded Nasdaq’s footprint in electronic trading and overseas markets, such as its $3.7 billion merger with Nordic exchange operator OMX, which was completed in 2008.

Friedman left Nasdaq in 2011 to become chief financial officer of private-equity giant Carlyle Group. But her former boss soon began wooing her back. The two met over dinner at a Manhattan restaurant one rainy night in early 2014, Greifeld recalled in a 2019 memoir. “I explained to her that I was planning to be at Nasdaq for a couple more years, but after that, she would be a natural choice to replace me,” he wrote.

She rejoined Nasdaq later that year. In January 2017 she became CEO and began work on what became known as the “strategic pivot.”

Under Greifeld, Nasdaq pursued growth by acquiring markets. Its systems were processing a huge amount of trading volume, and Nasdaq derived much of its revenue from collecting transaction fees. But running stock and options exchanges had become a tough, low-margin business due to the rise of electronic trading and increased competition between market operators. Moreover, Nasdaq’s revenues depended on the ebb and flow of trading activity. Simply put, the exchange business wasn’t that attractive anymore.

Friedman presented her vision at a board meeting in San Francisco in August 2017. Her plan: Nasdaq would evolve into a provider of technology, data and analytics to the financial industry. If successful, the new direction would bring fatter profit margins and replace volatile trading revenues with more recurring, subscription-based income.

She axed assets that didn’t hew to her vision, dumping a money-losing future exchange and selling a struggling bond-trading platform in 2021 for a fraction of the price that Nasdaq had paid for it eight years earlier. And she pursued deals to expand Nasdaq’s presence in data and technology.

Until this week, her biggest deal was Nasdaq’s $2.75 billion acquisition of Verafin, a software firm that uses artificial intelligence to help banks detect money laundering and fraud.

The Verafin deal closed in early 2021.

Acquiring Adenza is meant to push Nasdaq further in the same direction. The company provides technology to banks and brokerages to facilitate trading, risk management and regulatory compliance. If the deal goes through, Nasdaq projects that its traditional core business of executing trades will account for less than one-quarter of net revenues.

Friedman is determined to prove that buying Adenza will pay off in the long run. “We paid an appropriate price for an exceptional business,” she said.