By Britton O'Daly
CFRA LLC, a New York-based investment-research firm, has agreed to acquire data-and-analytics firm First Bridge Data LLC.
CFRA said the acquisition of First Bridge will allow the company to base its research on more in-house data instead of relying on third-party data providers. CFRA competes with larger research providers including Morningstar Inc. and Thomson Reuters Corp. to provide institutional investors and wealth managers with insights into the performance and potential of fund managers.
"We do the research, but we don't own the underlying data and analytics, " said CFRA Chief Executive Peter de Boer in an interview. "By owning that and investing in that, we set ourselves up to compete with companies like Morningstar."
Both CFRA and First Bridge are private. Financial terms of the transaction weren't disclosed.
In a news release, CFRA said its research team comprises 75 analysts spread across the U.S., England and Asia. Mr. de Boer declined to give any information on the size or revenue of First Bridge, which has a focus on exchange-traded funds. According to ZoomInfo.com, a business-to-business information provider, First Bridge has 21 employees.
Mr. de Boer said that acquiring First Bridge will put CFRA in line with Morningstar as the only companies who can "provide the holistic research and the underlying data and analytics." He added that this recent acquisition isn't about "efficiencies" or consolidating their own business, but expanding CFRA's capabilities for clients.
Mr. de Boer also said that CFRA would be able to distinguish itself by not having the same "conflicts in their business" as Morningstar. In November 2018, Morningstar launched nine of its own mutual funds, allowing the company to report on both the performance of fund managers to investors while offering competing funds of its own.
A Morningstar spokeswoman said that there are "strict governance rules to ensure the funds can accomplish the goal we set for them and operate without conflicts of interest."
The acquisition of First Bridge follows CFRA's purchase of S&P Global Inc.'s equity- and fund-research business in late 2016. CFRA was founded in 1994 as the "Center for Financial Research and Analysis."
Aniket Ullal, who founded First Bridge in 2011 and published a book in 2013 about ETF investment advice, is joining CFRA as an employee.