Lipper, a leading provider of mutual fund information and a wholly owned subsidiary of Reuters, announced last Tuesday that it has purchased the rights to acquire Hedgeworld and the TASS Research database. The company did not disclose the purchase price.
Hedgeworld provides news, research and data for its global hedge fund community of 55,000 hedge fund professionals and investors. TASS, a leading institutional-quality hedge fund database, covers more than 6,600 of the roughly 7,000 hedge funds, which renders it relatively free from survivorship bias.
Tremont, which owns TASS, has retained the right to use the TASS database, further strengthening the alliance between Lipper and Tremont. Tremont uses the TASS database in selecting managers in its fund-of-fund products and in the CSFB/Tremont indexes.
Both acquisitions are expected to enable Lipper to make forays into providing collective investment intelligence, which would help more investors make better investment decisions. Lipper's CEO Michael Peace said in a conference call that combining the TASS database with Lipper's database creates the world's largest investment management database.
This is not the first acquisition for Lipper, which tracks 125,000 mutual funds worth $10 trillion in 17 countries. Last October, it acquired London-based Fitzrovia, a leading fee and expense information company, with the intention of servicing clients with a global fund expense database.
Lipper's purchase of the two hedge fund databases comes at a time when assets in the roughly $1 trillion hedge fund industry are growing at a fervent pace. "It is clear from the fund awards going on in Asia and Europe that the investment population is looking for a broader range for collective investment analysis," Peace said. "Hedge funds will be of interest all the way from Asia to Europe to the U.S.," he added.
Peace said that Lipper, which is profitable and growing, was approached by members of the hedge fund community, who feel the need for an independent party assessment. "Lipper provides independent objectivity and analysis," he said. Besides that, the acquisitions direct Lipper toward expansion into new products for financial advisers and investors, he added.
Lipper, which will be the sole distributor of the TASS database, hopes to use the TASS data to help with investment decisions for Reuters buy-side products, Lipper Hindsight and Lipper LANA. With Hedgeworld, Lipper expects to reach out to the growing community of high-net-worth individual investors.
One of Lipper's key rationales behind the purchases is to integrate its mutual fund and hedge fund analysis on a unified software platform. Peace said that while Lipper leans toward breaking away from being merely a mutual fund research company, whether or not it would make more acquisitions in the future to expand into other areas of data provision could not be said with certainty right now.
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