People who Live in Glass Lewis Houses …


New York – In an October 6th Financial Times article, it was reported that Glass Lewis had been purchased by Ontario Teachers’ Pension Plan for $46 Million. Glass Lewis lives in the corporate governance research space and provides, most prominently, proxy services.

Glass Lewis had been owned by Xinhua for less than a year. Shortly after the acquisition, Xinhua ran into some corporate governance issues, which caused several key personnel, as well as a few clients, to defect from Glass Lewis.  Given Glass Lewis’ prominence in corporate governance it became problematic for the relationship to continue.

Glass Lewis is the second largest proxy services firm after Institutional Shareholder Services, which was bought earlier this year by RiskMetrics.  It is likely that RiskMetrics was in the mix as potential purchasers as well, given the competitive issues involved. Ontario Teachers (OTPP) is one of the largest asset managers in Canada, having assets under management of about C$106 billion. OTPP recently took a bite out of BCE, Canada’s largest telecommunication company. As such, the group seems to be acting more like a private equity firm than a traditional money manager of late. OTPP’s rationale for the acquisition was to ensure that there was adequate choice for shareholders as to corporate governance and proxy research.

Founded in 2003, Glass Lewis provides investment research, class action settlement solutions, and proxy management services. Its investment research products focus on analyzing areas of business financial statement, legal, accounting, regulatory and governance risk of global public companies. The firm offers web-based screening tools that cover a universe of roughly 4,200 U.S. public companies as well as research reports that analyze specific companies and accounting trends in detail. The firm’s proprietary models cover companies with a market cap of greater than $60 million and the firm’s reports emphasize companies with a market cap of greater than $750 million.

We see the Glass Lewis rapid transactions as a validation of our view that the research industry will continue to grow strongly, but also consolidate. In this environment of “speed dating” it is not surprising that there are a few matchups that don’t last long.  We expect that the pace of consolidation will remain vibrant for the next several years.


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