The Nasdaq-listed Morningstar Inc has continued its shopping expedition with a US$10 million purchase of the hedge fund and separately managed account database of software firm InvestorForce.
The deal, announced last week, marks the third major acquisition in six months by the cashed-up Morningstar. As well as the US$83 million it paid for asset allocation firm Ibbotson Associates, completed in March this year, in June Morningstar also paid AU$30 million for Australian equity research firm Aspect Huntley. All purchases have been in cash. InvestorForce, which provides online software applications and research tools to mainly pension fund and investment consultants, has agreed to sell Morningstar its AltvestTM hedge fund database, institutional separate account database and a variety of reporting tools. InvestorForce will also licence Morningstar’s hedge fund, mutual fund, and separate account data for its own web-based platform, which is used by pension consultants to manage the positions, transactions, analysis, and reporting for their plan sponsor clients, Morningstar said in a statement. According to the statement, the AltvestTM database will double Morningstar’s coverage of active hedge funds from 3,000 to 6,000. Following the integration of the InvestorForce separate account database Morningstar said its coverage of that sector will also include 6,000 products – 1,500 more than it currently researched. Anthony Serhan, head of consulting for Morningstar Australia, said the InvestorForce products would boost the capability of its institutional offering Morningstar Direct, which the researcher sells to the Australian and New Zealand markets. “The InvestorForce product will filter down through Morningstar Direct and we will have 6,000 hedge fund products listed by the end of the year,” Serhan said. He said while the separate account market is relatively small in Australia a number of local players are listed on the database and the sector is expected to grow. Morningstar said the US$10 million InvestorForce purchase should be signed off in August.
The changing nature of volatility in financial markets and a more client-centric approach that allows allocations to be tailored is helping more institutions adopt a total portfolio approach to investment management, the Fiduciary Investors Symposium at Stanford University has heard.
Prashant MehraOctober 8, 2024
