Research Rollups – New and Improved


New York – There have been a number of strategies in the new world of research over the past several years. With the downgrading of proprietary fundamental research as a value added service to clients[1]<!–[if !supportFootnotes]–>, many firms have been assessing the value of adding research to their current offering. As in any of these decisions, the build or buy analysis is central. Fortunately for many of the research properties in the independent space, it seems that it is consistently cheaper to buy than to build.

Rollup Strategy

Earlier, we reported on the sale of Glass Lewis, a proxy analysis and forensic research firm, from Xinhua Finance to RiskMetrics Group. Of course, RiskMetrics was spawned during the 1980s when market risk was a massive concern of the regulators.  As there web site now indicates they “extend their view of financial risk to include considerations in corporate governance, compliance, accounting, legal, transactional, environmental and social risks”.

RiskMetrics has engineered a quiet rollup of many of the inviting new elements of investment research and covers three main fields: risk management, Financial Research and Financial Analysis, and ISS Governance Services. Risk metrics has purchased Institutional Shareholders Services (governance), CFRA (Forensic and Earnings Quality) and Investors Responsibility Center (SRI) to augment its skills in these practices.

This and other rollups may have prompted the Ontario Teachers Fund to buy Glass Lewis from Xinhua Finance earlier this fall. One of the statements that Ontario Teachers made was that they were interested in maintaining competition in the proxy and forensic space.

Other rollups, as well and consulting relationships proceeding in the equity research space are likewise focusing on the primary research and specialized research space.  Integrity research is constantly monitoring this space and reporting it on these pages.  


According to Integrity Research’s definitions, primary research includes channel checking, data mining, expert networks, market research, search-based technologies and access to management services. Specialized research offerings are more diverse, including, but not limited to, corporate governance, socially responsible research, forensic research, earnings quality analysis.

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<!–[endif]–>[1] As Mark Twain might have said “the demise of fundamental research has been greatly exaggerated”. While we keep reading in various stories that fundamental research is dead, this is far from the truth. What is true, is that there has been a degree of contraction in the space, but this is a long way from dead or dying. Indeed, hedge funds report that there usage of fundamental sell-side research is about the same as it was several years ago.


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