CFRA Acquires Policy Research Firm Washington Analysis

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CFRA, the New York-based independent research firm that acquired S&P’s equity research business five years ago, recently announced that it has acquired highly rated independent policy research firm, Washington Analysis, LLC.

CFRA’s Recent Acquisition

Late last week, CFRA announced that it acquired independent policy, macro and sector research firm Washington Analysis, LLC from Ontario Teachers’ Pension Plan Board and Alberta Investment Management Corporation.

Founded in 1973, and headquartered in Washington D.C., Washington Analysis focuses on identifying non-consensus views by blending government and regulatory policy with financial analysis conducted by a team of highly experienced policy, macro and sector analysts. The firm covers the financial services and housing, healthcare, energy, defense, tax, trade and TMT sectors.  In addition to providing subscription research services, the company also offers due diligence services and access to policy events and calls.  

CFRA acquired Washington Analysis to add regulatory, state, and federal policy expertise to its existing equity research offering.  Ryan Schoen, CEO of Washington Analysis, will continue to run Washington Analysis as a division of CFRA.

Peter de Boer, CEO of CFRA explained the strategic rationale for the acquisition saying, “CFRA continues to create new value for our clients across both the institutional investor and wealth management segments of the market.  Public policy decisions impact our global clients and Washington Analysis helps to separate headline risk from fundamental changes to educate and empower investors in reaching their investment objectives with unique and high-valued added insights.”

Our Take

CFRA was founded in 1994 by Howard Schilit as the Center for Research & Analysis.  Schilit sold CFRA to TA Associates, a private equity firm, in 2003 for around $60 million or about 3.3x revenues.  TA Associates had ambitions of doing a research roll-up using CFRA as a core property.  CFRA revenues declined after the sale, however, and the roll-up did not come to pass.  TA Associates was able to turn around the revenue decline and resell CFRA to Riskmetrics (itself later acquired by MSCI) in August 2007 for approximately what it paid.

CFRA was spun off by MSCI in 2013 in a management buy-out engineered by Peter de Boer, who was previously head of strategy and development for S&P.  In September 2016, De Boer expanded CFRA by acquiring S&P’s global equity and fund research properties when S&P decided to dispose of them.  In August 2019, CFRA acquired ETF data provider First Bridge Data LLC signaling the firm’s desire to broaden its focus to serving wealth management clients in addition to institutional investors.

In our view, this acquisition makes sense as the two firms probably have very little user overlap, though we would not be surprised if a few of CFRA’s long/short hedge fund clients also use Washington Analysis.  However, we suspect many of CFRA’s institutional clients would also be prospects for Washington Analysis’ policy research.  We also doubt that many of CFRA’s wealth management clients currently get access to Washington Analysis’ research.  However, we suspect that CFRA will need to find a way to reposition this policy research for the retail market.  It will be very interesting to see if this acquisition works out.  Only time will tell.

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About Author

Mike Mayhew is one of the leading experts on the investment research industry. In addition to founding Integrity Research, Mike is on the board of directors of Investorside Research Association, the non-profit trade association for the independent research industry, and a frequent speaker on research industry trends and developments. Mike has over thirty years of research industry experience. Email: Michael.Mayhew@integrity-research.com

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