New York—YouGov plc, a UK-based market research firm, and Execution Limited, a London-based securities firm, recently dissolved their primary research joint venture, YouGovExecution (YGX). YouGov has taken over the YGX staff, and relaunched the service as YouGovAlpha, a market research agency dedicated to primary investment research. The YGX joint venture ran for 18 months and was successful—successful enough for YouGov to decide to go it alone. YGX staff has moved to YouGov's offices and YouGov indicates it will expand the effort.
The dissolution of YGX illustrates the dangers to securities firms of partnerships with research firms. YouGov is a prominent UK-based market research firm which had little previous experience in serving the investment community. Execution Limited, a fast growing execution-only trading firm, approached YouGov about developing a service targeted to investors. The benefit to Execution was that payment for the YGX services would paid exclusively through trades with Execution. After 18 months of partnership, YouGov believes it now has enough expertise in tailoring its services for investors that it no longer needs the joint venture. This is a cautionary tale for joint ventures similar to Instinet's distribution of IDC—there can come a point where the research firm feels they no longer need to commit to an exclusive brokerage relationship.
The full text of the press release follows.
9 August 2007
YouGov plc
Creation of YouGovAlpha
YouGov plc, the online market research agency, today announced the creation of
YouGovAlpha, the UK's only dedicated market research agency with services
tailored to the specific needs of fund managers and investment professionals.
Building on the recent success of YouGovExecution (YGX), YouGovAlpha provides a
competitive advantage to its clients by using primary research to gain insights
into the marketplace performance of sectors and companies ahead of trading
statements and publicly available information.
Execution Limited and YouGov plc have decided to amicably dissolve the YGX joint
venture. YouGovAlpha has moved all of the research consultants from YGX to
Execution Limited and YouGov plc have decided to amicably dissolve the YGX joint
venture. YouGovAlpha has moved all of the research consultants from YGX to
YouGov's current premises where it has room to expand the team further.
Nadhim Zahawi, co-founder and CEO of YouGov said: "The use of primary market
research is in its infancy in the investment community. However the feedback we
have had from YGX clients confirms that they gain a genuine competitive
advantage from fast and accurate primary research. The ongoing development and
investment in YouGov's panel coupled with its representative profile provides us
with considerable opportunity to extend our offer to the investment community.
YouGovAlpha will allow us to provide independent services to clients as we will
not be linked to a brokerage business or fund as a partner."
Neil Thorington, MD of YouGovAlpha commented: "These are exciting times for
everyone associated with the company. The creation of YouGovAlpha allows us to
focus more intently on assisting our clients in making better investment
decisions through ever more robust and quantifiable information. We are now in a
position to accelerate the development of new products and services to meet the
growing demand for primary research among the investment community. "
Integrity Research Associates, investment research, equity research, research providers, European investment research, primary research, market research, joint ventures
Posted at 11:32 am by Sanford (Sandy) Bragg
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