Case Blog

I spent the past week in London. While it was colder than normal, I missed the February blizzard that blanketed the northeast U.S. on Wednesday. Over the past several years, Mary Claire and I have managed to be in New York City for each of the major February snowstorms. This time she got to enjoy the winter wonderland without me.  It was hard to gauge on this trip if the Labour Party was bouncing back in time for the spring election or if the Tories had peaked too early, and no one I spoke with seemed ready to make a prediction.

Speaking of predictions, The Field General lost to the clever Sean Payton and the Drew Brees lead Saints. Congratulations to all those long-suffering Saints’ fans and the city of New Orleans. I trust that Peyton Manning and the Colts will get at least one more shot at another Super Bowl before Manning ends his stellar career.

While in London my meals were distinctively French. We had lunch with Dominic Hobson and the management team of Global Custodian at L’Oranger on St. James’s Street. This classic restaurant never disappoints. One evening we had dinner with John Lee and his senior team from The Trade at The Bleeding Heart Restaurant in Bleeding Heart Square, just off Hatton Garden. The ambience, service and cuisine were, as always, superb.  Both groups continue to build upon the strong momentum they established in the fourth quarter.  Finally, I got to try a new restaurant, for me, The Orrery Restaurant on MaryleBone High Street.  Orrery is located with Conran’s and is a superb restaurant, again French, with enough room between tables for one to truly enjoy a special meal with colleagues or friends.

On the M&A front in London, the announcement by Pearson (PSON/PSO ADR) in January that they were exploring options for their majority-controlled public company Interactive Data Corporation (IDC) brought out a long list of potential bidders. IDC is a global provider of financial market data & analytics for financial institutions and traders and is listed on the New York Stock Exchange. The company was formed in 2000 when Pearson merged FT Interactive Data Corporation with Data Broadcasting Corporation and gained the majority position. It is clear that with the amount of interest this auction has attracted, with bids due shortly, the winner will need to pay at least $3B for this trophy. The list of suitors according to the Wall Street Journal (WSJ, 2/3/10) and the Financial Times (FT, 2/10/10) includes many of the major private equity funds: Apax, Apollo, Bain, Blackstone, Carlyle, Hellman Friedman, KKR, Permira, and Providence. McGraw-Hill and Thomson-Reuters were listed as the two interested strategic acquirers. The FT also reported that Bloomberg, which recently purchased Business Week but does not have a history of large acquisitions, was not intending to bid.

Within the past two weeks it was also announced that the Financial Times had purchased Medley Global Advisors as FT continues to look for subscription-based data products to lessen their dependency on advertising. This relatively small acquisition is along the lines of Money-Media, another subscription-based business FT purchased two years ago.

It is clear that as global financial markets continue to recover the companies that have both the financial data and analytical tools that provide transparency will see significant EBITDA multiples offered when they come to market in an auction environment.

We will be announcing, shortly, the appointment of a managing director for Strategic Insight, who as part of the Global SI team will manage our expansion in the UK and the rest of Europe from our new London office.

I returned to New York City late on Thursday evening from a week in China. My trip, as I wrote in Summer’s End, was built around SWIFT’s Sibos 2009 event in Hong Kong.  It coincided with the one-year anniversary of Lehman Brothers’ filing for bankruptcy. As one looked around the exhibition hall in Hong Kong, it is clear that we are in a recovery. The press even reported during the week that Fed Chairman Ben Bernanke, in response to a question at the Brookings Institution said, “From a technical perspective, the recession is very likely over at this point. It’s still going to feel like a very weak economy for some time because many people will still find that their job security and their employment status is not what they wish it was.”  Dominic Hobson, editor-in-chief of Global Custodian, had a similar point-of-view when he told our guests at our event last Saturday evening in Hong Kong, to paraphrase: “That the world is still upside down, when the journalists are providing drinks for the bankers.”  I had the good fortune to follow Dominic to the podium and explain our plans for the global expansion of Asset International.

While the recovery will continue to expand, we will not see much job creation in the western economies over the next quarter or two. I am confident, though, that companies will start to add jobs in response to increasing demand by the second half of 2010. It was clear to me as we traveled to Beijing and Shanghai that China’s recovery was going to be much faster than the western economies  tied to the subprime debacle that took down Lehman Brothers and brought our entire banking system and the world’s major economies to the brink of the abyss. The energy and entrepreneurial spirit is alive and thriving in China.

We looked at several possible acquisition targets in China on this trip. While these businesses are still small by our standards, it is clear that they are growing quickly and that the demand for information and advisory services focused on the Chinese economy will continue to grow at a much faster pace than the overall economy.  We also came away with the understanding that the events business will continue to be an essential component of an overall strategy for growth in China.

Our second issue of ai5000 (www.ai5000.com), which will be released this week, will focus on the Asian/Pacific market with the cover story: The Metamorphosis of Chinese Capital.  Let us know if you have any colleagues that you would like to receive a complimentary subscription.

Last evening Mary Claire and I had the pleasure of dining at Eleven Madison Park. Chef Daniel Humm has made this the outstanding star in Danny Meyer’s restaurant universe. Daniel Humm came to Eleven Madison Park from Campton Place in San Francisco and has taken this restaurant to a new level over the past 12 months. Frank Bruni, who recently rotated out of his role of restaurant critic for the New York Times, elevated this lovely dining room to 4 stars on August 12th, 2009. The review is titled “A Daring Rise to the Top.” It is now at the pinnacle with Daniel and Per Se and just a handful of other establishments. Chef Humm works magic with his lobster dishes on most evenings. The wine list is extensive and clearly one of the best in the city. If you have a special occasion coming up, I strongly recommend that you call ahead early and make a reservation. www.elevenmadisonpark.com

We were originally planning to head to Blackhawk this week, but two very exciting transactions that we will announce shortly will keep us in New York City for the next two weeks.  While we  await the time when we can make these announcements, I thought I’d share some excellent diversions to tide everyone over as summer gets under way.

Within the past week, Mary Claire and I have paid two visits to what we lovingly refer to as my cousin’s cafe, Salumeria Rosi Parmacotto, which is the well-known Tuscan chef Cesare Casella’s latest creation. It is located on the Upper West Side of New York City (above Columbus Circle, on Amsterdam Avenue near 73rd Street). I knew we would be back this weekend, after having brunch last Sunday and Mary Claire telling Cesare that his caponata (cooked vegetable salad, with the primary ingredient being aubergine) was the best she had ever tasted.  He has taken a small plates approach, which is taking hold across the country, particularly in wine bars, and is very attractive in the current economic climate.  I trust that we will make one or two more visits before we head west. www.salumeriarosi.com

Tonight, I look forward to watching Phil Jackson coach the Lakers to his 10th NBA championship. With this win, he will stand alone. He has been tied at 9 with the legendary Celtics coach Red Auerbach. Looking back on Jackson’s record with the Chicago Bulls and Michael Jordan and now with the Lakers and Kobe Bryant, it is clear that he knows how to put together a winning team with the chemistry necessary to carry them all the way to the pinnacle of success. I am confident that this record will stand for many years.

If you make it west to Sonoma County this summer and are looking to have a spectacular dining experience, I strongly recommend that you make a reservation, well in advance, at Cyrus in downtown Healdsburg, just off the square. Their champagne and caviar cart to start the meal is exquisite. www.cyrusrestaurant.com

For wines I am going to focus on the much-maligned chardonnay and recommend several special wineries that consistently produce outstanding chardonnays.

Aubert: I have referenced Mark Aubert previously with regards to his outstanding Pinot Noir wines. His chardonnay releases are my personal favorites. www.aubertwines.com

Copain: With a slight detour from the chardonnays listed, if you are looking for something very different for a summer day, I recommend Wells Guthrie’s Tous Ensemble Rose, which is dry and crisp.  www.copainwines.com

Martinelli: Their winemaker/wine consultant, the legendary Helen Turley, consistently releases outstanding unfiltered chardonnays from several vineyards. www.martinelliwinery.com

Rochioli: This Sonoma-based winery consistently produces excellent chardonnays and sauvignon blancs. www.rochioliwinery.com

Williams Selyem: This legendary winery is known primarily for its pinot noir releases and has a huge fan base. While I continue to enjoy their pinot noirs, I am always intrigued by their chardonnay releases, which are very limited but are truly outstanding. www.williamsselyem.com

Starting on Thursday we will have golf’s U.S. Open Championship to focus on, with its return to the Bethpage Black Course on Long Island. Is Tiger Woods back in full force to defend his amazing ‘08 championship, and will he once again tame Bethpage Black as he did in ‘02? Will Phil Mickelson, a crowd favorite in New York, challenge him or will we see one of the younger pros in their 20’s make their move? Regardless of who triumphs, it will hold our attention as only a fabled major golf championship can.