New York – After several months of suspense, Primary insight-a former Bear Stearns expert network offering-announced a management buyout of the firm, by David DeRose and Leighton Thomas. JP Morgan will maintain a minority stake in the firm and the Hidary Group will be a majority owner.
Primary insight has a reputation for strength in the healthcare and technology spaces, though they work across all industry groups. Other areas of value add are the energy, industrials and basic materials sectors. As sell-side research departments continue to cut back on staffing and resources, anlaysts will have less time to explore and maintain their own sources and will rely more extensively on expert networks. In this environment, Primary Insight has an opportunity to grow rapidily.
There are essentially two extremes in the expert network model, one is to enlist an army of experts and have search software to access, screen and manage them. The other is more akin to custom recruiting, where client needs are handled in a more customized manner. All of the expert networks live along this continum, with Gerson Lehrman dominating the field in terms of number of experts signed on to the network. Primary Insight lives closer to the custom recruiting end of the scale.
There are about 40 expert networks that Integrity has identified. We define expert networks as research providers that connect clients with experts outside of the network itsself. We estimate that the gross revenue produced by the alternative research expert network industry is about $390 million globally(i.e. we exclude ENs that are owned by investment banks). The investment research component of this number is about 80% of the total, with the remaining serving corporate accounts.
The expert network space apears to be one of the most fluid industries in terms of M&A expectations in coming months, and we at Integrity are watching the industry closely. We are currently gearing up for a ResearchFocus report on the expert network space, which will include company information on the participants and the results of our buy-side survey. The report is due to be released in June.
We attach the Primary Insight Press Release below :
Release : IMMEDIATE
Primary Insight Completes Management Buyout from J.P. Morgan
New York, April 1, 2009 – Primary Insight, a former Bear Stearns business that serves institutional money managers with advice from a global network of industry experts, announced today that it has successfully completed a management buyout from J.P. Morgan. Financial terms of the deal were not disclosed.
Participants in the buyout of the newly formed entity, Primary Insight LLC, are Co-Founders and Managing Partners David DeRose and Leighton Thomas, who will continue in their current roles at the helm of the company. Additionally, The Hidary Group made a majority investment, while J.P. Morgan retains a minority interest and board seat.
“Having built Primary Insight into a formidable player in the primary research space these past four years, Leighton and I are looking forward to the next phase of growth,” said DeRose. “The expertise and success of the Hidary’s along with continued support from J.P.Morgan will enable us to continue providing the advice and analysis that our clients have come to expect from us.”
The Hidary Group, run by brothers Murray and Jack Hidary, is teaming up with DeRose and Thomas for the second time. The Hidarys worked with them as executives at Vista Research, an expert analysis firm founded by The Hidary Group, which was later sold to McGraw Hill/Standard & Poors in 2005. Prior to that, the Hidarys founded EarthWeb and successfully took the company public in 1998 with an IPO.
About Primary Insight
Primary Insight has a custom approach in providing institutional money managers access to a diverse, global network of experts across all industry sectors. Primary Insight differentiates itself through the delivery of fresh, non-commoditized experts who have had limited exposure to the investor community. Primary Insight emphasizes quality over quantity and tracks down the most appropriate experts for each investor call. Primary Insight currently serves top institutional investors in the US, the UK and globally. Please contact Primary Insight at http://www.primaryinsight.com/
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David DeRose, (646) 216-5210, email@example.com
Brian Marchiony, 212-270-2596, firstname.lastname@example.org