2010 State of the (Research) Unions


New York – 2010 was an eventful year for the research industry. In the face of tight budgetary constraints, the SEC decided to send subpoenas instead of Holiday Greeting cards. This was apparently also the case at the Department of Justice.  In addition to the regulatory mudslide, there was a spate of mergers & acquisitions in the research industry.  Agency brokerage houses were also active, in trying to add research offerings to their execution services.

It seems that the much awaited alternative research industry consolidation gathered steam in 2010, with 39 transactions recorded in our database. In the more notable camp, RiskMetrics Group was purchased by MSCI Barra for about $1.55 billion in February, Gartner bought AMR Research in May and Silver Lake Partners bought IDC in May. Silver Lake also owns expert network Gerson Lehrman Group.

Research roll-ups were led by: IHS, which bought iSuppli and CSM Worldwide; Morningstar, which bought footnoted.org and Realpoint LLC ; ITG, which bought Majestic Research and disclosure Insight; and Thomson Reuters which bought Point Carbon and Highline Financial over the year.

The first quarter was the most active month, with 14 deals being consummated. This was followed by Q2 with 12 deals-notably May was the strongest month with a total of 7 deals. The third quarter exhibited the summer dearth of deals containing only 5 deals and no deals in July. The fourth quarter picked again and 8 deals were sealed during that time period.

The monthly profile was as follows: January-Christopher Street Capital and Credaris; Decision Resources and BioTrends Research Group; Hudson Securities and Next Generation Equity Research; Liquidnet and OTR Global; Navigant Economics, Chicago Partners and Empiris: February-ARS Group and comScore; Medley Global Advisors and The Financial Times; footnoted.org and Morningstar; MSCI Barra and RiskMetrics Group; Mackie Research Capital Corp was formed by the merger of Research Capital Corp and J.F. Mackie & Co: March-Gerson Lehrman and China Real Estate Information Corp; IHS and CSM Worldwide;  NPD and Solarbuzz; Springboard Research and Hydrasight: April-Canaccord Genuity was formed by the merger of Canaccord Adams and Genuity Capital Markets; ITG and Disclosure Insight; Stifel Nicolas bought Thomas Weisel Partners Group: May-Gartner and AMR Research; Centre Info Limited and Inrate Limited; Morningstar and Realpoint LLC; AIS and Sustainalytics; Thomson Reuters and Point Carbon; Sutherland Global Services and Adventity Global Services; Silver Lake Partners and IDC: June-Cognolink and Epito AB; Soc Gen and Japaninvest: August-Kroll and LACE Financial; YouGovAlpha and Harrison Group: September-Business connect China and Maven Research;  OTR global and Assay Research; CapIQ and TheMarkets.com research business: October-ITG and Majestic Research; MF Global Holdings and Washington Research Group; Enterprise Management Assoc and Business Application Resource Center: November-Thomson Reuters and Highline Financial; IHS and iSuppli: December-Audit Integrity, Governance Metrics International and The Corporate Library; Markit bought the broker vote system of TheMarkets.com.

Many of the agency brokers bulked up, either by adding analysts or adding additional services. For example, Instinet and Liquidnet both added management access services. Two agency brokers were particularly aggressive, with Liquidnet investing in OTR Global and ITG buying Majestic Research and Disclosure Insight.

Undoubtedly, the pace of research consolidation will pick up in 2011. While much of the 2010 deals were based on economics, the prime motivator for consolidation in 2011 is expected to be fear.


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