01 Apr 07
Cross-Asset Ipreo Targets Issuers
Ipreo, the company formed by the merger of i-Deal, Hemscott and MarketPipe, is to bring its products together to target corporate finance officers at companies issuing stock or debt that require detailed data on their capital base and investors.
Hemscott and its Bigdough subsidiary had existing offerings in this space, but Ipreo chief executive Scott Ganeles says the merged vendor will launch "an additional suite of services," based around Bigdough's CRM database of buy-side prospects and Hemscott's financial content for corporate Web sites, combined with i-Deal's issuance workflow systems. "We're going to provide services to show who is buying your stock and why, and overlay that with a full breadth of consultative services," he says.
With capital issues becoming more complex and involving more parties, the investment banks that run the deals are using software like i-Deal to give the issuers themselves more participation in the book-building and deal-pricing process, Ganeles says. "And when the deal has been priced and is trading, it's a natural transition to say to the company, 'Now that you are a public company, this is the kind of information and insight that you should be providing on an ongoing basis. You should know who your investors are, you should have competitive intelligence about them and understand what they own of you and why,'" he says.
Cross-Asset Surveillance
The vendor is also planning to provide products that enable a company to monitor investment across its entire capital base, including debt, linked products and derivatives rather than just in its stock. "With the advent of the numerous investment products that have been created, and the linkages between them, if you are not keeping track of who is buying and selling your entire capital structure, you will make some very bad decisions," he says. "A stock surveillance service will only give you a portion of the picture."
He says this should help companies best reward their investors across all of a company's issued capital, and prevent situations where, for example, a company that borrows to reward equity-holders with a dividend ends up hurting larger investors in the company's debt whose holding is devalued because of the borrowing to finance the dividend.
"Traditionally, companies haven't really linked the two and been able to understand who owns their debt on a real-time basis," Ganeles says. And as companies discover new vehicles for raising money, they need to constantly monitor all those holdings after the initial issue. "With hedge funds, the buy side is no longer segregated by money markets, bonds and equities... So the convergence of the buy side necessitates that financial officers understand the linkage between all the investment products they have out there in the market on any given day," he says.
"The number one thing that CFOs are trying to do is lower their cost of capital. If you can understand who buys your issues and at what price, you can be a much more intelligent issuer. You can be a much more intelligent corporate officer and consumer of investment banking products," Ganeles says.
Max Bowie