May 1, 2006 - Institutional equity research firm Quantitative Services Group (QSG) has entered into a partnership with independent research and analytics provider Revere Data to focus on uncovering and analyzing the economic relationships between publicly traded companies. The partnership will officially begin on May 1, with QSG incorporating Revere into its research processes.
"As more fundamental managers and hedge funds look to enhance returns though systematic techniques, we believe harnessing the power of new and unique specialty databases is essential in uncovering inefficiencies in the market and, most importantly, excess returns," said Tim Sargent, president of Naperville, Ill.-based QSG. "Revere Data provides a detailed, bottom-up view of the economic interdependence between companies, customers and suppliers. Our clients rely on us for new ideas, and we are excited to be able to explain how Revere's unique views of marketplace interrelationships and dependencies can be utilized to enhance their sophisticated investment strategies."
Sargent noted that QSG continually reviews specialty data vendors and approached Revere about a potential partnership. QSG also has partnership arrangements with Chain Store Guide, RetailMetrics, Russell Investment Group and SNL Financial.
QSG will use the patented Revere Hierarchy and Revere Relationships databases, provide an independent verification of the efficacy of Revere's content sets and introduce a suite of stock-selection signals to assist the companies' mutual institutional clients with their investment strategies.
"We think the partnership leverages some of our core content capabilities with the quantitative research capabilities of QSG," said Kevin O'Brien, COO of San Francisco-based Revere Data. "They have quite a bit of expertise in building and running a variety of factor models specifically for more quantitatively focused buy-side customers. That expertise is something we want to get closer to, and we feel QSG has a very good repository of expertise in a variety of investment strategies."
One of the significant ways clients will benefit from the relationship is by gaining a better appreciation of what they can accomplish with Revere's content, said O'Brien. "With the explosive growth of quantitative trading and research, investors are looking for unique investing or arbitrage opportunities in the marketplace," he said. "We believe that with this partnership with QSG we'll be able to more quickly and succinctly quantify some of these capabilities."
Over the coming months, QSG and Revere will be collaborating on a series of written research reports describing the power, efficacy and application of the Revere Relationships databases within clients' various investment strategies, the companies said. "Some of the world's most sophisticated investment management and global financial services firms rely on Revere to help them search for, discover, organize and act on unique investment ideas faster and with much greater ease," explained O'Brien. "We look at the world differently than most by focusing on precise classification of companies and the products they offer, and the identification of their key business relationships. By teaming up with the premier provider of systematic stock-selection research, we're confident QSG and Revere will be taking idea generation and stock selection for the institutional marketplace to a new level."
Last month, Revere released a new version of its flagship Revere Research service. It includes the Revere Merger and Acquisition (M&A) Scenario report, said to be a first-of-its-kind resource for the investment banking community that shows what the result of a hypothetical merger would be in terms of overlapping and complementary product lines, business divisions, customers, suppliers and partners. The report also allows easy input of deal-financing scenarios based on target price, stock-cash-debt mix, goodwill and amortization assumptions, along with the pro forma financials on the combined company.
The data for the M&A report is generated by the Revere Hierarchy classification system, which specifies a company's business activities and identifies competitors, and by Revere Relationships, which maps companies to their key competitors, customers, suppliers and strategic partners.
"What takes investment banking, corporate finance, C-level executives, management consultants and business intelligence professionals days, weeks and even months to get answers to can now be compiled in seconds" with the reports module, said O'Brien. "The new reports and analysis capabilities in Revere Research are a major step forward in our effort to help customers search for, discover, organize and act on unique investment ideas faster and easier than ever before."