By Sanford Bragg October 20, 2020
Research Management Software provider MackeyRMS launched an ESG research workflow management module designed to help asset managers better leverage internal ESG data and research. Despite a growing number of firms offering RMS capabilities post-MiFID II, MackeyRMS continues to expand its staff and product line in the wake of a recent financing round.
The firm released an ESG Scorecards capability which allows asset managers to apply their internal ESG criteria more systematically to stock selection. The challenge for many asset managers is leveraging ESG data and research more consistently across all their investment teams as ESG investment principles have become more widespread. “Our ESG Scorecards give internal ESG teams a more structured framework within the RMS so that all their colleagues can benefit from their expertise,” said CEO Chris Mackey in an interview.
The solution, which integrates ESG ratings data from the client’s preferred external providers, was first developed for the company’s non-US clients. Assets under management (AUM) by funds applying ESG criteria topped $1 trillion for the first time in Q2 2020, with over 80% of ESG assets based in Europe. US asset flows into ESG funds have grown significantly over the last eighteen months, reflecting greater acceptance of ESG investing in the US.
MackeyRMS was founded in 2011 by Chris Mackey, a former TMT analyst at a long/short hedge fund. “I would go to conferences with my iPad but then – like a lot of analysts – would have to rush back to my hotel room to cut and paste my notes into the right firewalled systems,” said Mackey about his motivations for starting the firm. “I felt there was a need for a second-generation RMS that was mobile-friendly and more flexible than the siloed approaches of the legacy RMS providers.”
The Boston-based firm was founder-funded and has been profitable every year since founding, according to Mackey. Last year, the firm received a ‘significant’ equity investment from Atlanta-based private equity firm Resurgens Technology Partners, which has allowed the firm to recruit a series of senior roles including a new VP, Engineering, CFO and VP, Marketing. The firm is currently recruiting for a VP, Customer Success, and a NY-based salesperson. Current staffing is at 35 employees.
According to Mackey, the firm has well over 100 clients with users located in over 30 countries. The firm’s first customers were small and medium-sized asset managers, but the firm has been increasingly successful in winning larger global asset managers as clients. MackeyRMS clients currently manage over $3 trillion in AUM.
Legacy RMS providers include FactSet, which acquired Code Red in 2015; Advent Software, which acquired Tamale in 2008, and Bloomberg which developed its own RMS capabilities. MiFID II spawned over a dozen research distribution startups, many of which migrated into RMS capabilities designed to help asset managers track and value research consumption. Perhaps the most successful has been Red Deer, a spinoff from a London-based hedge fund. However, the majority of MiFID II new entries have limited RMS capabilities beyond tracking research interactions. MackeyRMS says it has found MiFID II a net positive, but its strategy is to allow clients to develop their own dashboards for measuring research consumption and applying valuations.
However, as the firm’s new ESG Scorecards demonstrate, the latest hot button is not research unbundling, but ESG. At many asset managers, ESG teams have historically been siloed in their own little ghettos, quite separate from the traditional fundamental investment teams. But now ESG is in demand as an overlay on non-specialist funds in addition to powering specialist ESG funds. Integrating ESG principles into core investment processes has become a higher priority, and with it comes greater centrality for ESG research.
- Visible Alpha Promotes Mark Hale to CEO (9)
- Shrinking Holding Periods Add to Stock Picker Challenges (9)
- Inex One Launches Advisory Board (9)
- Sell-Side Recommendations on Tech Sector Continue to Surge (9)
- Liquidnet Launches New Investment Analytics Product Suite (9)
- GreenKey Technologies Launches NLP Tool for Hedge Funds (9)
- Morgan Stanley Starts Rolling Out AskResearch Chatbot to Clients (9)