Aggregator Urge to Merge

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New York – These are busy times for research distributors.  StreetBrains, a research distributor, announced yesterday that it has sold its platform to InfoExchange Inc., another distributor.  Cuttone & Company, a boutique broker, affiliated with Think 20/20, a startup research aggregator.  Opalesque, a German hedge fund news aggregator, bought Carbon 360˚, a NY-based industry consulting firm focused on enterprise software for investment managers.  Research aggregation is not as easy as it looks.  The barriers to entry are not high but the barriers to success are daunting.

StreetBrains & InfoEx

InfoExchange, Inc., a research distribution platform that uses data from trade management systems to push relevant research to clients, has purchased certain assets of StreetBrains.  According to Larry Margolis, StreetBrain’s founder and Managing Member, StreetBrains will operate as an operating subsidiary of InfoEx.   StreetBrains will provide e-commerce distribution of research reports.  StreetBrains also offers an operational platform for research providers facilitating report production, conferences and webinars.  Link to press release.

InfoEx was founded in 2007 by Joe Cammarata, co-founder of Sonic Trading, a trade routing system later bought by BNY ConvergEx and Dean Stamos, who started Nyfix Millennium, the first listed alternative trading system (ATS).  The concept is to use trade order flow from trade systems such as Linedata Services and Portware to push alerts on relevant research reports to investment firms.  The addition of StreetBrains adds an e-commerce component for retail distribution of the research.

Cuttone & Think 20/20

Cuttone & Company, a NY-based institutional broker, recently announced a strategic partnership with Think 20/20, a newly formed network of nine analysts, salespeople and editors based in Reston Virginia with ambitions for research distribution and management access.   The partnership provides Cuttone with research product to distribute, as well as management access services.  Cuttone has existing distribution relationships with Epiphany Research, a technical analysis boutique, and Nirvana Solutions, which offers real-time portfolio management systems to multi-prime hedge funds.  Cuttone gives Think 20/20 distribution to Cuttone’s client base.  Link to press release.

Opalesque & Carbon 360˚

Opalesque Ltd., a European-based aggregator of content targeted to hedge funds, recently acquired Carbon 360˚, which analyzes and evaluates enterprise software sold to hedge funds, including order management, hedge fund accounting, portfolio management, investor relationship management systems.  Opalesque was founded in 2001 by German-based Matthias Knab and is best known for its daily news briefings targeted to hedge funds.  The firm has been expanding into research distribution, adding technical analysis in 2006 and commodities, real estate and futures research products more recently.  The addition of Carbon 360˚ extends its offerings to hedge funds.  Link to press release.

Summary

Research distribution is a deceptively tough business.  Entrenched competitors such as Thomson Reuters and theMarkets.com have a critical mass of content, which attracts and retains customers, which in turn attracts more content.  Startups face the challenge of building up content as well as customers, and it is a chicken and egg proposition.  To be successful, distributors need good, differentiated product combined credible distribution capabilities.  For InfoEx, the purchase of StreetBrains adds e-commerce distribution, which it hopes will attract additional research providers to its platform.  Cuttone’s deal with Think 20/20 is representative of the current demand from agency brokers for research content to augment their execution capabilities.  Opalesque is leveraging its base of hedge fund readership to add additional research content.  Each is symptomatic of the challenges for boutique research providers to gain clients.

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