Standard & Poor’s (S&P) has entered into an agreement to sell the managed funds data arm of its operations to Morningstar for US$55 million.
The division of S&P to be sold consists of information held on performance, rankings and holdings relating to over 135,000 funds spanning more than 30 countries, as well as desktop applications and data feed products.
Under the agreement, S&P will licence back the data from Morningstar for use in its research and ratings services.
S&P Australia managing director Australia Chris Dalton said: “Historical fund data is used as a screen for our fund ratings and research business, but it is not core to our business of providing independent qualitative ratings and analysis for the global fund industry.
“The sale will enable us to invest further to add value to local fund managers, dealer groups and independent financial planners through the provision of forward-looking investment tools,” he added.
S&P has stipulated that its fund rating and investment consulting services will not be affected by the sale.
“Australia is a key market for S&P’s global funds business. We remain committed to maintaining our leading position in the provision of fund ratings and research for the Australian wealth management markets,” Dalton said.
S&P has cited its plans to expand other parts of its operations as the driver of the deal.
“We have ambitious plans to expand the fund ratings and research business by widening the pool of funds that we rate, increasing our research capacity and developing additional distribution channels throughout the world for our market-leading analysis and opinions,” S&P executive vice-president Deven Sharma said.
Morningstar said the deal fits well with its own expansion plans, which are aimed at broadening its brand, presence and products for investors and advisers globally.
In particular, it will immediately give the researcher a stronger foothold in the European market where S&P has been operating for over two decades.
The sale is subject to customary closing conditions and is expected to be completed in March.
