Morningstar Inc, the recently listed US research firm, has paid $US83 million to buy asset allocation firm Ibbotson Associates – a deal that will help its Australian subsidiary expand into the fund-of-funds and superannuation markets.

The decision by Morningstar to buy Ibbotson’s was made late last year and is expected to be signed off by the end of this quarter. Ibbotson’s specialises in constructing actively managed fund-of-funds for institutions, whereas Morningstar globally has a bias towards the retail market. In Australia, Morningstar has attempted to expand into the asset allocation business and hired former Assirt executive, Anthony Serhan, three years ago to build its institutional capacity. According to Joe Mansueto, Morningstar Inc CEO, the Ibbotson purchase will boost the company’s growth prospects. “We will immediately broaden our reach in the areas of investment consulting, investment management, and managed retirement accounts,” Mansueto said in a statement. “We’re excited about joining forces with Ibbotson to expand our range of services to investors around the globe.”; After remaining a private company for many years Morningstar listed in the US last year. Following completion of the deal Morningtar will begin global distribution of Ibbotson’s products including the EnCorr software package for investment management and strategic asset allocation; its database of long-term capital markets returns; and asset allocation, forecasting, and optimisation software Professor Roger Ibbotson, founder of Ibbotson Associates, also claimed Morningstar was a “good fit” with his company. “;Joe and I both started our companies as boot-strap ventures, and we run our businesses with an entrepreneurial spirit,” Ibbotson said. “We have worked with each other for many years and I can’t think of a better partner for our business.”; According to Morningstar, Ibbotson’s produced annual revenue of over $37 million in the year ending June 30, 2005.

Join the discussion