Ned Davis Research (NDR), an investment strategy subsidiary of Euromoney, announced a partnership with a money manager to launch investment product based on its research.
Global View Capital Management, a Wisconsin-based asset manager, will be launching a series of Tactical Strategies based on NDR’s institutional research and models. The research will be synthesized for the allocation tilts of its domestic and global strategies.
Global View uses a ‘fund-of-funds’ structure that primarily utilizes exchange-traded funds (ETFs) to implement the NDR strategies. There will be four different strategies driven by NDR models and graduated by risk. A fifth conservative model is designed to address the needs of low risk strategies by offering growth potential in a low interest rate environment.
Global View is the first platform chosen by Ned Davis to make its research available in retail models, but presumably not the last. For this type of deal, NDR has a range of choices: a fixed fee license deal, which has no upside; a deal where payment is graduated based on assets under management; or some combination of the two.
Research firms such as NDR can increase the payments from investment product driven by their research if they are structured to be the sub-advisor to the product. The tradeoff is that the sub-advisory fee will be determined by how successful the product is in attracting assets as well as the size of the management fee.
Some firms such as TrimTabs have gone so far as to establish asset management affiliates to capture a greater percentage of the management fee. The tradeoff here is that research firms typically need help in distributing the investment product, otherwise assets under management languish.
NDR’s venture with Global View is a small toe in a very large ocean. Nevertheless, as traditional sources of research revenues become more difficult, an increasing number of research firms are exploring how to monetize their intellectual capital through investment product.