Ford Equity Research Acquires Columbine


Ford Equity Research has acquired Columbine Capital Services’ quantitative research business through an exclusive licensing agreement.  Terms of the acquisition were not disclosed.

Effectively immediately, Ford assumed Columbine’s operations, including production, distribution and marketing of the research products.

Columbine was founded in 1976 when John (Jack) Brush, a quant PhD working in a military research laboratory, decided to model stock prices.  The first model, designed to model price momentum, was launched three years later.  Marketed as the Columbine Alpha Factor service, it was primarily used by fundamental institutional investors as an overlay to qualitative analysis.

Lawyer David Ament joined Columbine as a principal in 1985 as Brush began to develop more models and build out Columbine’s business.  Not satisfied with just an overlay model, Brush launched his first stock selection model in 1986 which offered stock rankings.  The initial stock selection model, labeled the Combo Model Service, combined valuation and momentum factors in a style-neutral approach.

The next effort was to begin building international models resulting in the launch of country specific versions of the Alpha Factor overlay model in 1991.  The next year Columbine launched an international stock selection model based on the Combo model, which is now available in country specific versions for 30 non-U.S. markets.

At the same time, Columbine launched in 1991 a small cap valuation model which combined fundamental and technical efforts and a cap-weighted large cap stock selection model.  It launched a consensus earnings model in 1995 along with a pan-international stock selection model.  In 1997 it separated its stock selection model into distinct momentum and valuation models.  In 2001 it launched an industry sector valuation model.

In all, Columbine sells 11 different models, which is part of its marketing challenge.  The other frustration for the firm has been promoting its international models, particularly to non-U.S. investment managers.  Nevertheless, Columbine has enjoyed a steady core of loyal clients, primarily long-only managers who use Columbine’s model either as initial filters or as overlays supplementing their fundamental analysis.

Columbine has engineered a graceful exit after thirty seven years.  We are surmising that the purchase is structured as a revenue share over a defined period of time, during which Columbine’s services, or at least the most broadly utilized, will be separately marketed by Ford.  Ford is likely to institute process improvements in the back end of the models, such as substituting its data for other sources, to reduce costs.

One of the more interesting opportunities is for international expansion of Columbine’s non-U.S. models.  While Ford does not have a large non-U.S. footprint, it is better positioned for non-U.S. sales than Columbine has been.

Ford is an excellent partner for Columbine.  Its models predate Columbines by a few years, and it is experienced in marketing quantitative services to institutional investors.   Like Columbine, it has quality products and a good reputation.  While neither party will make the Forbes list as a result of the transaction, it should yield respectable results.

For the full release go to


About Author

Leave A Reply