MSCI Barra buys Riskmetrics
It is not every day that the two
largest providers of risk management systems and portfolio analysis
to the Asset Management industry merge.
Riskmetric’s revenue from risk sales is over
$150 million and Barra’s revenue’s are about $200 million. The next
largest supplier is Algorithmics which is owned by Fitch and has
about $100 million in revenue. Thereafter the size of risk
companies falls away although there are many competing companies.
The problem for Asset Managers is that what they really want is a
Risk Service and that means the supplier must provide the data as
well. Barra and Riskmetrics have always done this (indeed StatPro
does too - read more about our Risk Management solution
here) but most participants do not. This means that the
acquisition will give the combined entity a very strong position in
the market.
I am not familiar with anti-trust law but I
imagine that MSCI checked with both the US and EU authorities
before they proceeded with their offer. Whether or not it breaches
the anti-trust rules, it will cause some of their clients a pause
for thought. Being in a position to abuse does not make you an
abuser and if MSCI look to give their clients better value (more
for less) I am sure that they will welcome this deal.
From StatPro’s point of view we are looking to
broaden our market with our new on-line product StatPro
Revolution which includes a risk management service
from just $100 a month. Indeed, our view is that
technology will change everything in Portfolio Analysis just like
it is changing everything else. The older established companies
move into ex-growth cash generation whilst the newer companies with
the latest technology compete to be the top provider.
In the mean time, if there are any Risk specialists
out there that want to move to pastures new, StatPro is looking to
expand.
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