Case Blog

In one of my earliest postings in September of ‘07, Global Brands, I wrote: “As we transition to a digital world, managing our brands becomes ever more demanding. Microsoft, which has done wonders with the Windows and Office brands, stumbled as they tried to rebrand Hotmail, IM and Search under the Windows Live brand. I am certain that with their unlimited resources they employed several of the best branding agencies in the business, but they still struggled through this transition. Those of us who come to this with much less in the way of outside assistance must clearly understand that we need brands that can travel globally…All of us in the B2B or B2C space tasked with transitioning to the digital world are looking for the Holy Grail, an umbrella brand that inspires confidence and trust and at the same time can support many vertical channels. Strategy sessions and market tests play an important role in this process. Marketing dollars invested in branding will yield significant returns, although without strong digital brands there is not much chance of survival for print brands, even those with storied histories.”

In the fall of ‘07, my partners at Austin Ventures and I were still in the search mode to find a platform that we could acquire and grow.  It was almost a year later when we zeroed in on the institutional financial sector, with a focus on asset management. In fairly short order, we acquired Asset International, The Trade, and Strategic Insight.

We decided that we would operate under the Asset International name, as it provided a very clear brand and would allow us to add significant brands under the Asset International umbrella. Today we have established a new London office for Strategic Insight to support the Simfund Global database and analytics platform. In the next several months we will open a comparable office in Hong Kong for our expanding client base to support these well-known business intelligence products and services. This client base historically has been composed of mutual fund companies, but recently we have seen it expand in the U.S. to include other business sectors, including private equity firms that have a strong interest in the financial sector.

In addition, this past spring we launched Plan Sponsor Europe out of London. With this very strong retirement-focused brand and its print, online, research reports, and conference components, Plan Sponsor Europe is offering longtime clients like State Street (STT) a known brand to support their defined contribution efforts in the United Kingdom and on the continent. They have reserved our prime real estate, our back cover, to deliver their message for the balance of the year. In ‘11 we will launch Plan Sponsor Asia/Pacific edition. Recently, Global Custodian released its 2010 Prime Brokerage Survey, which received wide coverage in the business press and was quickly established as the standard for this segment of the industry. This brand, along with Strategic Insight, has had a global impact for more than 20 years.

The TRADE expanded its business several years ago by launching The TRADE Asia and this year launched The TRADE Growth Markets. They also expanded their global web presence with www.thetradenews.com. Finally, ai5000, which focuses on the professional information needs of the Chief Investment Officers of the largest global assets owners, launched their Chief Investment Officer Summit (CIOS) in New York and will hold the second summit in London on October 7th and 8th.

We will continue to expand our business by investing in our core brands on a global basis and serving the needs of our client base in the major markets they operate in.

You can learn more about our global brands and how they can assist you build your global market share by going to www.assetinternational.com.

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.

For the first time in many years, Mary Claire and I had our family join us at our home in Blackhawk for the entire holiday season. The Bay Area at this time of year has winter, but a more temperate and rain-filled winter than one finds back on the east coast. Last evening I sat in the rain at the Emerald Bowl, hoping that my alma mater, Boston College, could find a little Christmas magic to upset the USC Trojans. But after an exciting first half that ended 14-13, the Eagles fell back to earth and were beaten 24-13. In between winter rain storms there have been a number of days in the high 50s to low 60s, which has allowed me to work on a rusty golf game with my son Jordan.  We are looking forward to celebrating New Year’s Day with friends & family.

As we reflect back on this year, I trust all of us are looking forward to better times in 2010. While no one is predicting a huge upswing in GDP, everyone does agree that the Great Recession is over and that this is a time of rebuilding for the global economy. Last January I wrote in Playbook, “The unemployment rate of 7.2% announced last week could easily climb above 10% by the end of the first quarter if the various stimulus plans fall short.”  Unfortunately, the U.S. unemployment rate climbed to over 10% — the damage that it did to the consumer and overall economy is still being assessed. We look forward to a recovery that will start to bring down the unemployment rate to match those of earlier recoveries. Treasury Secretary Geithner has tried to reassure us that the Obama team will be vigilant against excess risk in the financial system to protect us from another financial crisis. I personally hope that we all benefit from at least a 5-7 year recovery cycle.

Early last January we had just completed our acquisition of Asset International. While the first year, particularly the first two quarters, were challenging, we are pleased with the progress we have made on transitioning the business to an increasingly digital world and one where community remains at the center of its universe. We added The Trade in July and Strategic Insight in August. Our focus during the close of ‘09 was on creating one company, with a common corporate culture of excellence, focused on the institutional financial markets around the globe.  As we turn to 2010, we plan on continuing to grow both organically and through strategic acquisitions that will add value to our existing brands.  Today approximately 50% of our revenue comes from data and analytics; online revenue, research and events contribute another 30%; and print contributes approximately 20%.  Our brands have retained their leadership position and our clients are once again turning to them to rebuild their market positions and to find new customers in New York, London and elsewhere around the globe.

Happy New Year & a Warm Welcome to 2010!