US – Investment research firm Morningstar says its $83m (€69.6m) cash acquisition of asset allocation firm Ibbotson will boost its investment consulting business.
Chicago-based Morningstar announced the purchase of privately held Ibbotson Associates late yesterday, saying the deal would combines Ibbotson’s expertise in asset allocation with its own expertise in security selection and investment research.
The acquisition would “create a stronger investment consulting business both in size and range of services,” Morningstar said.
“This acquisition fits with several of Morningstar’s growth strategies,” said chairman and chief executive Joe Mansueto. “We will immediately broaden our reach in the areas of investment consulting, investment management, and managed retirement accounts.
“We’re excited about joining forces with Ibbotson to expand our range of services to investors around the globe.”
And it would become one of the largest providers of managed retirement accounts in the US and further its goal of developing its investment management business. Ibbotson has £3.5bn in this area, to be added to Morningstar’s $225.9bn.
Ibbotson has 700 institutional and 70,000 adviser clients and 150 staff. It made a loss in the most recent financial year of $1.3m on revenues of $37.2m.
Company founder Professor Roger Ibbotson – who set up the firm in 1977 - and president Mike Henkel will remain.
Mansueto added: “I have long admired Ibbotson’s work, and this acquisition is a logical move that will further strengthen Morningstar’s institutional and advisor businesses.”