RiskMetrics Group’s acquisition of environmental, social and governance (ESG) research provider Innovest Strategic Value Advisors should extend its reach into the ESG analysis market in Australia, according to industry participants.

Ann Byrne, chief executive officer of the Australian Council of Super Investors (ACSI), said the combination of the two complementary businesses should result in “a lot more brains working together, rather than separately”.

The acquisition would make the domestic ESG research market more competitive, she said.

Originally a risk management systems vendor, RiskMetrics acquired proxy voting advisor ISS Proxy in 2007 and now offers this capability to clients.

It also provides ESG research, data feeds and portfolio screening tools. But tapping into Innovest’s analyst network and research should enhance its offering, the company said in a statement.

Bill Hartnett, chief executive officer of Innovest in Australia, said the outcomes of the takeover had not been finalised.

He said there was not much overlap between the two companies and, for the foreseeable future, business would continue “as usual”, but indicated the RiskMetrics IT platform could enable better distribution of research.

“Assessments of a company’s intrinsic value will still be the hallmark of our offering.”

He said the firm’s Australian headcount of seven had not been reduced. 

ACSI uses proxy voting services from RiskMetrics while also drawing on research from Innovest. Another client of both businesses is boutique global equities manager Five Oceans Asset Management.

Ross Youngman, chief executive officer of Five Oceans, said the acquisition would enable to provide an additional, complementary service that was appropriate in a market that featured an increasing numbers of signatories to the United Nations Principles of Responsible Investment (UN PRI).

“More people are signing up to the UN PRI, and to have all the pieces in one place makes sense.”

Innovest has not informed either client that its research processes would change as a result of the acquisition. 

 

Leave a comment