New US Securities and Exchange Commission rules will act as a catalyst for converging public and private markets and further drive demand for financial data, Neil Cochrane, partner at Motive Partners, told affiliate title PE Hub Europe.
Motive Partners acquired a majority stake in With Intelligence, a data provider for allocating, fundraising and business development in the public and private markets, for $516 million in late July.
“We can see a further convergence of private markets with public markets’ infrastructure tools and data requirements,” said Cochrane. “That’s driving a lot of activity in the sector.”
A recent ruling by the SEC requires private fund advisers to provide quarterly information on fund fees and performance. Anything promoting greater transparency and consistency in the industry is “an overall net positive,” says Cochrane. “It will probably come with some increased costs in terms of producing that level of information,” he said. “It also points to the convergence of private and public markets, and it’s a good example of what is demanded by the allocators as well. It’s overall a very exciting time for the industry.”
Despite M&A such as Morningstar’s acquisition of Pitchbook and MSCI’s acquisition of Burgiss, the sector remains fragmented, according to Cochrane. The M&A plan for With will stick to the company’s strategy of the past two years, namely attempting to penetrate more private market asset classes, Cochrane explained.
In January, With Intelligence acquired CAMRADATA, a data and analysis service for institutional investors, from Punter Southall. The acquisition was With’s sixth since February 2020. “We’ll also look at getting access to additional data sources and the tooling around [the] LP and GP space,” he added.
Some of the value-creation focus will be on With’s hedge fund offering. “There are some potential incremental data and product offerings to be launched on that side,” said Cochrane.
Follow the data
The geographic expansion strategy is still to be determined. With has offices in London, Boston, Bournemouth, Cardiff, Cebu, Hong Kong, New York and Singapore. Roughly two-thirds of its revenue comes from North America, where Cochrane expects further expansion.
“Clearly the US is extremely important, whether it’s state pension schemes, endowments or foundations,” he said. “In the Middle East there are sovereign wealth funds and family offices. It’s important to follow where the data and clients are from a LP and GP perspective.”
Cochrane described New York-headquartered Motive’s portfolio “complementary” for With, as the PE firm has been active in the asset and wealth management sector. The firm’s portfolio includes companies such as Wilshire, CAIS, FNZ and InvestCloud. Many of them are focused on the trend for democratizing the alternatives market, he added.