RESEARCHFOCUS EXPERT NETWORKS
November 2009
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Integrity Research Associates, LLC is an information and solutions provider specializing in the investment research industry. Our primary clients are institutional investors that use Integrity’s services to find new research providers and monitor existing ones. Integrity’s analysts cover over 2,800 research firms in the U.S., Europe and Asia—research providers that no other source can offer.
Integrity Research is the only firm that tracks the entire research industry, including non-traditional research, boutiques and research-related data, software and analytics. We cover primary research firms and other alternative research firms which offer the most unique investment insights.
Our clients are research directors, broker liaisons, analysts and portfolio managers within money management firms and hedge funds. Asset managers turn to Integrity to increase alpha by finding innovative sources of research, manage the risk associated with current research providers and to keep on top of the latest industry developments.
Integrity Research has no “hidden agenda” for recommending research providers. It is not compensated by commissions from research providers. Our revenues come from the investment managers that hire us to provide high quality, unbiased recommendations.
For more information, please contact:
Matthew Bannister – [email protected] – 646-786-6851
Jim Kempski – [email protected] – 646-786-6865
Integrity Research Associates, LLC
53 W. 36th St, Suite 1002
New York, NY 10018
© Copyright 2009 by Integrity Research Associates, LLC.
Federal copyright law, Title 17 of the U.S. Code, makes it illegal to reproduce this report by any means and for any purpose, unless you have our written permission. Copyright infringement carries a statutory fine of up to $100,000 per violation. We offer a reward of $2,000 for information that leads to the successful prosecution of copyright violators.
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Table of Contents
Section I - Executive Summary ...... 9
Section II - Analysis of the Expert Network Market ...... 13
Definitions and Integrity’s Research Process ...... 13
History of the Expert Network Market ...... 18
Recent Developments ...... 19
Market Sizing ...... 21
What are expert networks being used for? ...... 22
Expert Network Usage Trends ...... 23
Importance of Expert Networks ...... 26
Finding the Right Experts ...... 27
Demand Trends – Expert Engagements ...... 29
Demand Trends – Types of Experts ...... 29
Demand Trends – Geographic Coverage ...... 31
Demand Trends – Sector Coverage ...... 32
Pricing and Spending on Expert Networks ...... 33
Payment Methods ...... 37
Concerns and Complaints about Expert Networks ...... 37
The Non-User’s Perspective ...... 39
Outlook for the Expert Network Industry ...... 41
Expert Network Market Forecast ...... 45
Summary of Market Overview for Expert Networks ...... 45
Section III - Expert Networks and Compliance ...... 47
Stakeholders ...... 48
What are the major compliance risks? ...... 48
Components of Compliance ...... 50
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General Practices ...... 51
Recommended Compliance Policies ...... 52
Key Compliance Processes ...... 53
Key Compliance Tools ...... 54
Compliance Analysis ...... 55
Evaluation of Expert Network Compliance Policies ...... 57
Evaluation of Expert Network Compliance Processes ...... 58
Evaluation of Compliance Tools and Systems ...... 59
Client Perception of Compliance ...... 62
Overall Compliance Ratings ...... 63
Does Compliance Matter? ...... 65
Section IV - Comparison of Expert Network Firms ...... 66
Methodology ...... 66
Important Factors in Selecting an Expert Network ...... 68
Cost Effectiveness ...... 71
Uniqueness of Experts ...... 72
Depth of Coverage (Specialization in relevant industries and regions) ...... 73
Customer Support ...... 74
Speed of expert recruitment / matching process ...... 75
Survey Capabilities...... 77
Other Services ...... 78
Section V – Top Picks ...... 79
The 'Top Picks' Methodology ...... 79
Top Picks: Global Generalist ...... 81
Top Picks – Healthcare Specialists ...... 85
Top Picks – Technology Specialist ...... 87
Top Picks – European Specialists ...... 89
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Leading Expert Network Firms – Asia-Pacific & Emerging Markets...... 90
Section VI – Company Profiles ...... 92
DISCLOSURE ...... 143
List of Charts and Figures
Growth of Expert Network Firms in Operation ...... 18
Expert Network Headquarters Locations ...... 18
Expert Network Market Share, 2008 ...... 21
What types of insight do you typically use expert networks to gain? ...... 22
Roughly how many expert consultations do you currently use in a typical month? ...... 23
Do you currently access experts through your own contacts and connections? ...... 24
Over the past 12 months, how has your total usage of expert consultations changed? ...... 25
How many expert networks do you use regularly?...... 26
Compared to other components of your investment research process, how important a role does access to experts play?...... 27
Which is your preferred mode of engaging experts? ...... 28
How do you prefer to engage experts? ...... 29
What types of experts would you like to have better access to in the future? ...... 30
Are there any geographic regions where you would like to receive improved expert access? ...... 31
Are there any sectors where you would like to receive better expert access? ...... 32
How do your current expert networks charge you for their services? ...... 33
What type of pricing model would you most prefer? ...... 34
Approximately how much does your firm currently spend on expert network services annually? ...... 35
How has your spending on expert networks changed in the last 12 months? ...... 36
What best describes how you pay for expert network services? ...... 37
If you have previously used expert networks, what made you stop? ...... 39
Are there any specific reasons why you do not use expert networks? ...... 39
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Do you think you might use an expert network service within the next 12 months? ...... 40
Do you expect the number of expert networks you use to change in the next 12 months? ...... 41
How do you expect your total usage of expert networks to change in the next 12 months? ...... 42
How do you expect your total spending on expert networks to change in the next 12 months? ...... 43
Expert Network Market Share, 2009 (est.) ...... 44
Expert Network Market Forecast – 2010-2014 ...... 45
Compliance Policies Ratings - US Firms ...... 57
Compliance Policies - non-US Firms ...... 57
Compliance Processes - non-US Firms ...... 58
Compliance Systems - US Firms ...... 59
Compliance Systems - non-US Firms ...... 60
Client Rating of Compliance ...... 62
Overall Compliance Ratings – US Firms: ...... 63
Overall Compliance Score - non-US Firms ...... 64
Expert Network Popularity ...... 67
Important Factors in Selecting Expert Networks ...... 68
Expert Network Match Quality ...... 69
Cost Effectiveness of Expert Networks...... 71
Uniqueness of Experts ...... 72
Depth of Coverage ...... 73
Customer Support ...... 74
Speed of expert recruitment / matching process...... 75
Survey Capabilities ...... 77
Other Services ...... 78
CognoLink Ratings Summary ...... 98
Coleman Research Ratings Summary ...... 100
DeMatteo Monness Ratings Summary ...... 102
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Epito Ratings Summary ...... 105
Gerson Lehrman Ratings Summary ...... 115
Guidepoint Global Ratings Summary ...... 118
MEDACorp Ratings Summary ...... 123
Primary Global Ratings Summary ...... 127
Primary Insight Ratings Summary ...... 129
Reuters Insight Ratings Summary ...... 132
List of Company Profiles
Abrams Research ...... 93
AlphaSights ...... 94
Business Connect China Inc. (BCC) ...... 95
Capvision Partners ...... 96
CognoLink Ltd...... 97
Coleman Research Group, Inc...... 99
DeMatteo Monness LLC ...... 101
Engage Experts LLC ...... 103
Epito AB ...... 104
Epocrates, Inc...... 106
Ergo...... 108
Evalueserve Circle of Experts ...... 109
ExpertView ...... 112
Frontier Strategy Group (FSG) ...... 113
Gerson Lehrman Group, Inc...... 114
Greenwood Research ...... 116
Guidepoint Global ...... 117
HCRC (Health Care Research & Consulting) ...... 119
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Intota ...... 120
Maven Research, Inc...... 121
MEDACorp ...... 122
Medical Consulting Referral Inc...... 124
Nemo ...... 125
Primary Global Research ...... 126
Primary Insight, LLC ...... 128
PRNewswire - ProfNet ...... 130
Public Insight LP ...... 131
Reuters Insight ...... 132
Riedel Global Experts ...... 133
Roulston Research ...... 134
The Round Table Group ...... 135
Sermo ...... 136
SinoTouch ...... 137
Success Stories Media, Inc...... 138
Techdirt Insight Community ...... 139
Tribeca Insights ...... 140
VeriMed Healthcare Network ...... 141
Zintro, Inc...... 142
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SECTION I - EXECUTIVE SUMMARY
Expert networks are one of the most dynamic sectors of investment research generally, and alternative research especially. Initially embraced by hedge funds, expert networks, which assist primary research by facilitating consultations with industry experts, are now widely used by a broad cross-section of investors, from hedge funds to mutual funds, investment advisors, pension funds and private equity investors. Our most recent survey of expert network users, conducted during the third quarter of 2009, suggests that 36% of investment management firms are users of expert networks.
The recent financial crisis has not dampened demand for expert networks services, despite attrition in the number of hedge funds and layoffs in buy-side staff. Expert networks have become firmly embedded in the investment process. Although the crisis caused a hiatus in investment activity, it did not alter the trend toward increased primary research by investors, nor expert networks' status as the tool of choice. Over 40% of all expert network users rated expert networks as either 'extremely' or 'very' important to their investment process. For hedge funds, expert networks are even more critical, with over 60% of hedge fund respondents rating expert networks as 'extremely' or 'very' important to their process.
Nevertheless, the last twelve to eighteen months have been a turbulent period for expert networks, as for all forms of investment research. We estimate that overall spending on expert networks will decline by 16% in 2009 to $364 million from $433 million in 2008. This reduction is not so much the result of diminished usage, although some expert network clients were obliterated or merged during the crisis, but more from price competition. Some expert networks used the crisis as an opportunity to increase market share with more aggressive pricing, and some clients, looking for opportunities to reduce spending, forced unilateral fee reductions.
Amazingly, expert networks continue to proliferate. This Integrity ResearchFocus® report covers 38 expert networks, up from 25 firms covered in our last report in February 2008. Within the last 12 months, 6 new expert networks launched: Engage Experts, Nemo, Riedel Global Experts, AlphaSights, Maven Research, and Zintro. In addition, existing research firms are adding expert network capabilities. Barriers to entry remain relatively low, and the attractiveness of the sector continues to draw new entrants.
Despite increasing competition, Gerson Lehrman Group remains the dominant market leader among expert networks. Gerson commands two-thirds of expert network market share. When combined with the next four largest expert networks, Guidepoint Global, Coleman Research, DeMatteo Monness, and MEDACorp, the top five networks collectively represent 85% of the market. Although barriers to entry are low, scale provides important benefits. The larger expert networks not only offer larger networks of experts but also broader industry sector coverage, additional services such as surveys, conferences and roundtables, better technology, and generally more robust compliance capabilities.
Gerson Lehrman Group remains the leader on all fronts, reflecting its scale and its willingness (and the willingness of its owner, Silverlake Partners) to reinvest in the business. Gerson has been aggressively expanding its business over the past eighteen months, and now has eleven
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non-US offices (four in Europe including a new operations hub in Dublin and seven in Asia including an operations hub in New Delhi). In September 2009, GLG acquired TGR Research, a Paris-based boutique network, to deepen its services for continental Europe. It also has eleven non-English versions of its website, for use by non-US clients and experts. Before the peak of the crisis, GLG grew its business with the sell side through highly publicized deals with Credit Suisse and Morgan Stanley. It targeted smaller hedge funds through a distribution deal with Merlin Securities' prime brokerage in July 2009.
The last 12 months have seen the strengthening of full-service rivals to Gerson Lehrman. Guidepoint Global acquired Vista Research from Standard & Poor's in May 2009. The acquisition vaulted Guidepoint into the number 2 position, expanding Guidepoint’s reach beyond its traditional strength in healthcare into other sectors such as technology, and providing more extensive non-US presence and strong compliance capabilities. Coleman Research has expanded organically, building offices in Beijing, Hong Kong and London, expanding its sector coverage and its sales staff, and adding to its compliance capabilities. Similarly, DeMatteo Monness announced a deal with LinkedIn in July 2009 that provides DeMatteo with preferred access to LinkedIn’s network for expert recruitment purposes. Finally, JP Morgan sold Primary Insight (previously owned by Bear Stearns) to The Hidary Group and the firm’s management in April 2009, and Primary Insight subsequently opened offices in London and Shanghai.
The adversity of the last twelve months has also taken its toll on expert networks. Vantage Marketplace, KnowledgeBid and The Shore Council/iNano Group ceased operations in the last 12 months. Reuters Insight is not currently actively marketing to new customers, but is still serving existing customers. Sermo and The Round Table Group stopped actively marketing to new financial services clients, and are focused on serving corporate clients.
The expert network model has expanded globally over the last year, as investors in all regions demand access to more geographically diverse experts. Over half of expert network users surveyed desire improved coverage of Asian experts. In this Integrity ResearchFocus® report, we cover thirteen firms which specialize in sourcing non-US experts. CognoLink, Epito, AlphaInsights, ExpertView, and Nemo Services focus on Europe. Capvision, Sinotouch, and Business Connect China specialize in China. Success Stories Media is based in Japan and Engage Experts is devoted to India. Riedel Global Experts, Ergo, and Frontier Strategy Group specialize in global emerging markets.
The Pequot and Galleon insider trading scandals appear to have similarly left expert networks unscathed, so far. The scandals underline the importance of expert networks' investments in compliance policies and procedures. We have even heard murmurs from regulators that the scandals will end up driving more primary research activity toward expert networks, since they provide a compliant framework for regulating interactions with company insiders.
Not all expert networks are equally convinced of the importance of robust compliance capabilities. For this report, we queried each firm about their compliance capabilities. A number of expert networks refused to discuss their compliance capabilities with us, in many cases because they are minimal. Furthermore, our survey of expert network users showed clearly that, for buy-side analysts and portfolio managers at least, compliance is not a major consideration.
We believe that it is a mistake for any expert network to de-emphasize compliance. Compliance systems and processes of the type outlined by our recommended best practices are essential to
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gain business from the larger expert network users, whether hedge funds or long only asset managers.
Based on our assessment of compliance capabilities, Gerson Lehrman Group is the top ranked expert network provider on compliance issues, followed in the U.S. by Coleman Research Group, and Guidepoint Global. Among non-US based firms, we consider Evalueserve’s compliance practices to be the strongest, followed by Cognolink and Nemo Services.
For this report, Integrity surveyed 301 hedge fund and long only investors, including 120 users of expert network systems, to better understand how they use expert networks, which networks they prefer, and why. We asked users which factors they consider when selecting expert networks. There are nine major factors: the skill with which they match the appropriate experts with client requests, cost effectiveness, uniqueness of the experts provided, the firm’s compliance capabilities, depth of coverage, customer support, speed of the matching process, survey capabilities and additional services such as conferences.
We asked expert network users to rank the factors by importance. The most important factor, by far, is the skill with which expert networks source experts based on client requests. To evaluate match quality we asked users to tell us the percentage of successful expert matches generated by their expert networks. Scores ranged from a low of 48% (Primary Insight) to a high of over 70% (Epito). Coleman Research and Reuters Insight also scored well on match quality.
Cost effectiveness was the second most important factor among users, reflecting the extreme cost consciousness in the wake of the financial crisis. The top scorers on cost effectiveness were Epito and Coleman Research. The next most important factor was the uniqueness of the experts sourced, and for this metric the top performers were MEDACorp, the healthcare specialist expert network offering of Leerink Swan, and Guidepoint Global.
MEDACorp was also the standout on depth of coverage, reflecting its robust healthcare offering, followed by Gerson Lehrman. For customer support, the top providers were MEDACorp and DeMatteo Monness. Users cited MEDACorp and Coleman for speed of matching, MEDACorp and Reuters Insight for surveys, and MEDACorp and Gerson Lehrman for other services.
The most frequently cited expert networks by users were Gerson Lehrman, Guidepoint Global and Coleman Research.
Based on the survey results, we ranked expert networks reviewed in this Integrity ResearchFocus® report on the nine metrics users cited as considerations for selecting expert networks. Each factor was weighted based on the importance given to the metric by users, with one exception -- compliance. Expert network users give compliance little consideration, deferring in many cases to dedicated compliance personnel or senior management. For our rankings we gave compliance capabilities a significantly higher weight than the user survey suggested, as compliance is an important screening factor for hiring an expert network even though it may not play a major role in day-to-day analyst/PM usage of expert networks.
Based on the resulting rankings, we selected 4 firms as 2009 Top Picks for Expert Networks. Each Top Pick is chosen from a specific category of expert networks: Global Generalists, Healthcare Specialists, Technology Specialists, and European Specialists. We did not receive enough survey responses to choose a top pick for Asian or other Emerging Markets Specialists.
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The 2009 Top Pick for Expert Networks in the Global Generalist category is Coleman Research, reflecting strong showings in match quality, cost effectiveness, speed of matching and depth of coverage. Gerson Lehrman Group was runner up with high scores in compliance (#1) and depth of coverage. DeMatteo Monness received honorable mention with top ratings in customer support.
The 2009 Top Pick for Expert Networks among Healthcare Specialists is MEDACorp, which had spectacular feedback for the uniqueness of its experts, depth of coverage, customer support, matching speed, survey capabilities and other services.
The 2009 Top Pick for Expert Networks for Technology Specialists is Primary Global Research, which was well reviewed for its customer support.
The 2009 Top Pick for Expert Networks for European Specialists is CognoLink, which has strong customer support and compliance. Epito was runner-up, reflecting strong match quality and cost effectiveness.
This edition of Integrity ResearchFocus® reports begins with an overview of the expert network segment which discusses the expert network sector generally, how investors use expert networks, and why investors value them, incorporating results from our user survey. We then analyze the expert networks' compliance programs. We review “best practices” for the policies, procedures, and compliance tools, and we evaluate the compliance programs for specific expert networks based on how well they match the best practices standard. We then provide a comparative analysis of the different expert networks based on feedback received from the user survey. From this analysis, we select the 2009 Top Picks for Expert Networks, with the Runner-Up firms and Honorable Mentions. We also include other notable firms to consider, based on their technology, business model or other factors. We conclude with our analysis of the future of the expert network industry. Profiles of each of the 38 expert networks identified in this review are included in the final section.
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This section provides an overview, historical background information, and outlook for the global expert network industry.
We estimate that the expert network market in 2009 will generate $364 million in revenue, which represents a 15% reduction from 2008. Gerson Lehrman continues to dominate market share, and the top 5 firms control over 85% of the market. Based on a survey of 279 randomly-dialed buy-side investors, 36% of institutions surveyed use Expert Networks as a normal part of their investment research process. 41% of all users felt that expert networks were either an “extremely” or “very important” part of their investment research process, reflecting 61% of hedge fund users who felt this way and 29% of long only investors who felt this way. The median buy-side participant in our survey conducted 5 expert consultations per month, and subscribed to 2 different expert network providers
This section also include details on expert network operations and usage trends, pricing models and spending patterns, customer feedback, and notes on recent industry developments.
SECTION II - ANALYSIS OF THE EXPERT NETWORK MARKET
DEFINITIONS AND INTEGRITY’S RESEARCH PROCESS
Integrity Research Associates defines an expert network as a firm that provides clients with direct, ad hoc access to experts with domain knowledge. Expert networks may serve institutional investors (portfolio managers and analysts), corporations, consulting firms, private equity and venture capital funds, and sell-side analysts. For the purposes of this study, we will be focusing primarily on those expert networks that serve the buy-side community (including hedge funds, mutual funds, and private equity). These firms do not usually provide investment advice or recommendations – their role is primarily restricted to connecting clients with experts. They do not typically have any direct role in the consultations, except for providing assistance in scheduling and interpretative service where there is a language barrier.
The illustration below shows a simple diagram outlining a typical expert network transaction. It excludes payments to experts and client billing methods, which differ widely between expert network firms and even within the same firm (ie, different clients may be charged differently,
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based on transactional, subscription, or hybrid pricing models). Client fees are discussed in more detail later in this section and in Section 4.
Fig. 1: How expert networks work – schematic illustration
Client defines project Client may provide Relationship customer feedback manager initiates on experts search
Consultations take Additional Experts located place between within internal experts may experts and client expert database be requested by client
Calls are Additional experts custom scheduled recruited
Compliance Expert profiles screening, vetting are sent to to ensure good client match with client needs
The graphic above shows an expert network that makes use of both a “standing network” of experts who have been pre-screened and vetted, as well as custom recruitment of experts for a specific client request.
All research provided by an expert network is a knowledge transfer from an expert to a client. Expert networks are comprised of three components: 1) the client/investor, 2) the intermediary (expert network), and 3) individual experts. After sourcing a short list of qualified experts, the intermediary typically steps out of the interaction between the expert and the client.
Sourcing and vetting experts is handled by the expert network in a variety of ways, including both active and passive approaches. Some firms may hire external recruiters, task internal staff with finding experts, and invite experts to join through various marketing methods. Larger firms tend to have a standing network of experts they can call on, whereas smaller firms are more likely to custom recruit experts every time that they receive a client request. Once identified, experts fill out a web form and enroll as an expert in a particular area. To be included as a part of the network, the expert needs to accept the specific network’s Terms and Conditions and undergo necessary compliance training. Compliance is covered in more detail in Section 4.
Although most expert networks have reduced the barriers to entry so experts need to fulfill only minimal terms and conditions to join the network, this does not ensure that the expert will participate in consultations. In order to be eligible for consultations, and to pass vetting
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requirements for specific projects, experts are typically expected to provide at least a CV or resume with detailed information about their experience and specialization. Some firms may ask experts to submit publications, references, or sign-offs from employers confirming their ability to participate in outside consultations. The employer sign-off is not only a useful piece of corroborating evidence, but is very important from a compliance perspective, as it helps to prevent concerns about experts breaching their fiduciary duty to employers by engaging in outside consultations.
A few expert networks interview every expert they recruit; however, most of the largest networks don’t do this, simply because the large volumes of experts they recruit make interviewing each expert inefficient from a cost/benefit standpoint. Generally speaking, smaller expert networks tend to have more extensive vetting procedures for each individual expert. However, smaller networks may also be inconsistent in the degree of vetting they conduct or the data they collect. Smaller firms may have a weaker data infrastructure and less well- developed business processes when it comes to vetting experts. Larger expert networks with significant data infrastructure spend less time on vetting each individual expert, but are more likely to collect a consistent, standardized, searchable set of data from hundreds of thousands of experts.
When a client requests a consultation, the expert network’s client service representatives search their databases for applicable experts in the subject matter. A short list of experts is generated by combining various search technologies with human effort; custom recruitment may be employed if the internal database turns up an insufficient number of experts. This enables expert networks to produce a final list of appropriate experts for the client to use. Typically within 12-72 hours, these experts are relayed to the client; the client then chooses from the list of experts and contacts the experts directly to discuss the question, issue or topic. Some firms also offer a ‘self-serve’ model whereby clients can directly search their database and request a consultation with an expert they identify.
Large, major expert networks are more likely to have extensive “standing networks” of experts which they can supplement with custom recruitment as necessary. Smaller firms are much more heavily reliant on custom recruitment.
Firms that are focused on custom recruitment may have very small or even non-existent standing networks. For these firms, every engagement is treated as a bespoke project, and experts are recruited specifically for each project. This model is particularly common with smaller, early stage expert networks, which operate on the basis of locating experts “just in time” for client needs, as opposed to gathering and maintaining a large inventory of experts in anticipation of client needs. These firms may make use of specialized recruiters, trade associations, and contacts within industry to locate experts on an as-needed basis. This model is economical in that it eliminates the need to invest in an elaborate database of experts and systematic recruitment efforts. From a client service perspective, the custom recruiters promise experts that are more “unique” and less likely to have their insight disseminated widely across the market. On the other hand, custom recruitment typically takes more time than finding experts in an existing expert database.
Following the consultation, the client service representatives may solicit feedback from both the expert and the client. This information may be used as an input to rank experts in future
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searches in terms of their usefulness in specific areas. Experts submit an invoice for payment, and the client firm will have to approve the payment request in order to close the transaction.
The experts who consult through expert networks are usually employed otherwise – either as employees of public or private companies, as independent consultants or entrepreneurs, or as professionals, including physicians, lawyers, etc. Most of the experts who consult through expert networks do not consider themselves to be employed full-time by the expert network.
In recent years, a number of industry consulting firms and investment banks have tried to market their own analyst-access and management-access capabilities on an ad hoc basis. This has led to a certain degree of confusion regarding the definition of an expert network. However, in order to maintain consistent comparisons, we do not consider these services – whereby a consulting/research firm provides access to its own employees, or an investment bank provides access to corporate management – as being “expert networks.” We will focus on those firms whose primary aim is to provide direct access to independent industry and domain experts on an ad hoc basis.
Expert networks primarily serve four types of clients: hedge funds, long-only investors (mutual funds and pension funds), private equity investors and corporate clients (this group includes consulting firms). Some also serve sell-side firms. Each of these groups has different motivations and needs, leading to unique client solutions for each segment. Hedge funds are traditionally the largest users of expert networks both by volume and by revenue. Long-only funds have increased their usage of expert networks in recent years, particularly as they have increased their internal research staffing. Private equity firms use expert networks when evaluating potential investments in private companies. Corporations, consulting firms, and law firms were the original users of expert networks. Corporations look for advice from industry experts to tune up product launches, gauge their competitive environment, or assess the potential pricing and revenue that can be achieved. Historically, usage by corporations is modest relative to other types of clients, although some leading expert networks have identified corporate clients as a potential growth area for their businesses.
In this report, Integrity has focused primarily on client demand from investors, including hedge funds and long only asset managers, because these are currently the largest segment of expert network users. In order to study the state of the expert network market in 2009, Integrity Research has conducted an extensive research project involving all of the major stakeholders in the market. During the 3rd Quarter of 2009, we carried out a detailed and extensive buy-side survey wherein we interviewed 283 institutional investors, 122 of whom commented about their usage of expert networks. Some survey demographics:
50% of the survey participants are located in North America, 33% are Europe, and the remaining participants are in Asia-Pacific. The Assets Under Management of the firms that we interviewed totaled over $7 trillion, with a range from approximately $100 million to $1.5 trillion. The median AUM for those firms that chose to disclose their AUM during the survey is $10 billion. 35% of our survey population consists of hedge funds, and 60% consists of mutual funds and long-only asset managers. The remaining 5% are private equity funds. 38% of survey participants are analysts, and 58% are portfolio managers or have the joint job designation of portfolio manager/analyst.
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86% were focused on investment in equities.
In addition, the team at Integrity collected data directly from 38 different expert network firms. The data collected includes detailed information on each firm’s services, coverage, capabilities, and compliance processes. We carried out on-site visits with many of the leading firms in order to gain a hands-on understanding of their recruitment, matching, and compliance processes.
As part of our survey, we also interviewed 20 buy-side firms that do not currently use expert networks in order to better understand the perspective of those who are not yet sold on the expert network research model.
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HISTORY OF THE EXPERT NETWORK MARKET
Expert networks have gained in prominence and popularity among buy-side clients in recent years. The oldest expert networks have been in operation for 25 years, but in the last 5 years there has been very rapid growth in the number of expert network firms who are competing in the market for buy-side clients.
Growth of Expert Network Firms in Operation
Figure 1, Source: Integrity Research ResearchSelect® Database
Despite this evidence of a crowded market, it should be noted that the majority of these firms are headquarted in the United States. Although a few of the US based firms have offices in other countries, it would seem that the expert network business is still far less prominent outside of the US.
Expert Network Headquarters Locations
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Figure 2, Source: Integrity Research ResearchSelect® Database
Recent years have seen significant growth of expert networks both inside and outside the US, though at a significantly faster rate outside the US. Out of a total of 29 US-based expert networks that we cover in this report, 24% have been founded since 2007; out of a total of 13 non-US-based expert networks covered in this report, 77% have been founded since 2007.
RECENT DEVELOPMENTS
The following expert network firms have been founded in the last 12 months: Engage Experts, Nemo Services, Riedel Global Experts, AlphaSights, Maven Research, and Zintro. The following firms ceased active operation in the last 12 months: Vantage Marketplace, KnowledgeBid, and The Shore Council/iNano Group. Gerson Lehrman Group acquired TGR Research, a French expert network, in September 2009 After repeated speculation on launching its own expert network or primary research business, LinkedIn announced a deal with DeMatteo Monness in July 2009 that would provide DeMatteo with preferred access to LinkedIn’s network for expert recruitment purposes. Vista Research, one of the oldest and biggest players in the business, was purchased by Guidepoint Global in May 2009. This expands Guidepoint’s reach beyond its traditional strength in healthcare into other sectors such as technology; the combined business is expected to be the second largest expert network in operation. JP Morgan sold Primary Insight (previously owned by Bear Stearns) to the firm’s management in April 2009. The Hidary Group made a majority investment, and JP Morgan retains a minority interest and a board seat. Reuters Insight is not currently actively marketing to new customers, but is still serving existing customers. Sermo has stopped actively marketing to new financial services clients, and is focused on serving corporate clients. The Round Table Group chose to refocus its business on serving its traditional client base in the legal and corporate world, and is no longer serving the financial market.
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In April 2008, the Gerson Lehrman Group announced a joint marketing arrangement with Morgan Stanley’s Alphawise primary research division. In November 2008, they announced a major agreement with Credit Suisse. GLG has also expanded into the corporate market for expert network services.
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MARKET SIZING
Based on information collected from both buy-side sources as well as conversations with expert network company managements, Integrity estimates that the global expert network market generated approximately $433 million in revenue during 2008. Of this market, Gerson Lehrman is estimated to take the lion’s share of the business with 66% of the market. Firms like Coleman, DeMatteo Monness, MEDACorp, and Guidepoint/Vista also command significant revenues, capturing 24% of the market between them. The vast majority of revenue is concentrated in the top 5-7 (out of 45) players, the top 5 alone taking over 85% of the market.
Expert Network Market Share, 2008
Figure 3, Source: Integrity Research estimates
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WHAT ARE EXPERT NETWORKS BEING USED FOR?
Previously, we defined expert networks as firms that provide direct access to industry and domain experts. The following charts provide more insight into exactly what types of insight clients are gaining from expert networks.
Overall, the most frequent area of interest that expert networks are used for, identified by over 70% of all users, is market and company background. Following this, European users are most likely to be interested in forecasts and macro/economic issues, while North American users are most likely to be interested in current trends. Accounting and legal issues are significantly more likely to be of interest to North American users than their European counterparts.
What types of insight do you typically use expert networks to gain?
Figure 4, Source: Integrity Research Buy-Side Survey, Sample Size: 120
Between hedge funds and mutual funds, the biggest area of difference was in the level of interest in macro/economic issues. 62% of mutual fund users said they used expert networks to gain insight on macro/economic issues, while only 37% of hedge fund users betrayed any interest in this area.
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EXPERT NETWORK USAGE TRENDS
Overall, Integrity estimates, from its random sampling of investment firms, that 36% of institutional investment management firms in North America and Europe currently use expert networks. This is an extremely high market penetration compared to many other types of alternative and independent research.
60% of buy-side clients who use expert networks reported using them between 0 and 9 times per month. The median buy-side participant in our survey conducted 5 expert consultations per month via the various expert network services they subscribe to.
Roughly how many expert consultations do you currently use in a typical month?
Figures 5, Source: Integrity Research Buy-Side Survey, Sample size: 110
Although the number of power users using more than 25 consultations is very small, as shown on the chart above, it should be expected that these users are responsible for a disproportionate share of expert network revenues.
In addition, the majority of users also continue to speak to experts through their own contacts outside of formal expert network arrangements. As you can see from the chart on the next page, 66% of the analysts and portfolio managers at long only asset management firms and 86% of hedge fund professionals who participated in our survey also access experts by leveraging their own personal network of contacts.
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Do you currently access experts through your own contacts and connections?
Figure 6, Source: Integrity Research Buy-Side Survey, Sample size: 115
Usage of expert networks has remained relatively steady over the last 12 months, with the vast majority of users (72%) reporting no significant change in their usage. As you can see from the chart below, only 17% of the survey participants who answered this question reported that the number of expert consultations they conducted in the past 12 months has increased, while 11% report that the number of consultations has fallen.
It is interesting to note that long only users of expert networks have stayed very steady in their usage – with 82% reporting no change. Hedge fund usage has been more variable, with only 55% of hedge fund users reporting unchanged usage over the same time frame. This could be a result of the fact that research spending at hedge funds tends to be more volatile and dependent on market conditions.
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Over the past 12 months, how has your total usage of expert consultations changed?
Figure 7, Source: Integrity Research Buy-Side Survey, Sample size: 118
64% of expert network users use 1 to 3 expert networks regularly – it should be noted that while a firm may have subscriptions to multiple expert networks, these results are reported at the level of an individual user (portfolio manager or analyst). There is, however, a fat-tail of ‘power users’, approximately 20% of our survey population, who report making use of 10 or more expert network firms. Nevertheless, the median buy-side user in our sample uses 2 expert networks on a regular basis.
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How many expert networks do you use regularly?
Figure 8, Source: Integrity Research Survey, Sample Size: 116
Only 10% of all users reported adding any new expert networks to their roster over the past 12 months, while 5% reported firing any expert networks over the past 12 months. However, due to the perceived sensitivity of disclosing such actions, these numbers may be significantly underreported.
IMPORTANCE OF EXPERT NETWORKS
Users seem to place a fairly high value on the services already provided by their current expert network providers, with very few users claiming that expert networks are not an “important” part of their research process. 41% of all users felt that expert networks were either an “extremely” or “very important” part of their investment research process.
Some distinctions may be drawn between different types of funds. Hedge fund users were three times as likely as long only users to rate expert networks as “extremely important” to their research process: 21% of hedge fund users chose “extremely important” in answer to this question, while only 7% of long only users did the same. 61% of hedge fund users rated expert networks as either “extremely important” or “very important”, while 29% of long only users did the same. While 4% of long only users said expert networks were “not important” to their research process, not a single hedge fund user felt the same. This helps to establish the fact that hedge funds remain the most engaged buy-side market for expert network services.
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Compared to other components of your investment research process, how important a role does access to experts play?
Figure 9, Source: Integrity Research Buy-Side Survey, Sample size: 117
FINDING THE RIGHT EXPERTS
Expert recruitment and matching are among the most important value drivers for expert network services. Currently, there is a two-tier market. At one end, there are a small number of very large firms with standing networks, which can serve a large number of requests from ‘in- network’ experts who have already been recruited. At the other end, there are a large number of expert networks who specialize in a small sector or geographical niche, or who operate purely on a custom recruitment basis, finding new experts for every client request. The trade-off is time – custom recruitment usually takes longer, even though the match quality may be higher. Some of the large expert networks advertise themselves as being capable of custom recruitment in addition to providing quick access to experts from their standing networks.
Overall, our survey revealed a slight preference for the ‘custom recruitment’ model, even if it involves sacrificing turnaround time. 54% of the survey participants felt that they would prefer to wait to get access to custom recruited experts compared to the 46% who preferred getting immediate access to experts sourced through a large standing network. This result was
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particularly true of North American users, where the broad penetration of large expert network providers may make it harder to find unique experts who can provide informational alpha than in other geographies. By contrast, users in Europe prefer (53% to 48%) gaining immediate access to experts as opposed to custom recruitment.
Which is your preferred mode of engaging experts?
Figure 10, Source: Integrity Research Buy-Side Survey, Sample size: 120
Custom recruitment was preferred by a plurality of both hedge funds and long only investors – 54% of hedge funds stated this as their preferred method, while 53% of long only investors said the same.
In qualitative comments, hedge fund investors were most likely to state that their biggest concerns or issues with their expert network providers had to do with the ‘uniqueness’ of the experts they were speaking to. Meanwhile, long only investors were much more likely to comment on turnaround time, speed of recruitment and matching, and lack of broad coverage as being their major issues with expert network providers. This suggests that hedge fund analysts are more likely to be willing to wait for the ‘right’ expert to be custom recruited, while long only analysts are more interested in getting broad coverage quickly and conveniently.
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DEMAND TRENDS – EXPERT ENGAGEMENTS
In spite of the fact that many expert network providers are beginning to offer survey capabilities, the majority of clients still prefer to engage experts through the traditional means of telephonic consultations, one-on-one meetings, and written reports.
How do you prefer to engage experts?
Figure 11, Source: Integrity Research Buy-Side Survey, Sample size: 120
While there is little difference on a regional basis, it is clear that hedge funds have the strongest preference for telephone consultations. While this is also the primary choice among long only users, 61% of long only users revealed an interest in written research reports, and nearly 50% showed interested in in-person meetings and events. Only 26% of hedge fund users were interested in receiving written reports from experts.
DEMAND TRENDS – TYPES OF EXPERTS
We also surveyed buy-side users regarding the types of experts they would find most valuable, and to whom they would like improved access in the future. Hedge fund investors showed the most interest in gaining improved access to independent consultants, managers, and entrepreneurs; meanwhile, long only investors were most interested in improving their access to senior executives of firms, as well as independent consultants and managers. There was a
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relatively low level of interest in doctors, accountants, and lawyers, indicating that the market for access to these types of experts is already very well served.
What types of experts would you like to have better access to in the future?
Figure 12, Source: Integrity Research Buy-Side Survey, Sample Size: 110
The results are fairly consistent across geographic regions. North Americans investors showed higher interest in purchasing managers, operational staff, and sales staff; meanwhile, European investors showed a high level of interest in management, senior executives, and business owners.
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DEMAND TRENDS – GEOGRAPHIC COVERAGE
Geographically, expert network users of all kinds are most interested in gaining access to high quality experts in Asia – this was a consistent preference regardless of the location of the respondent or the type of firm.
Are there any geographic regions where you would like to receive improved expert access?
Figure 13, Source: Integrity Research Buy-Side Survey, Sample Size: 110
Our study also reveals that expert networks have a very low (statistically insignificant) market penetration rate in Asia – and a very small percentage of expert network firms have any kind of official presence in Asia. Clearly, this is an area of unmet demand for expert networks – from both Asian investors and even more strongly from foreign investors investing in Asia.
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DEMAND TRENDS – SECTOR COVERAGE
Users are most interested in getting better access to experts in the financial services industry, clearly an area of greatest unmet demand. Investors were also interested in getting better access to experts in the technology and healthcare sectors - at least in North America. European users showed little interest in health care. These trends are probably cyclical and dependent on market conditions.
Are there any sectors where you would like to receive better expert access?
Figure 14, Source: Integrity Research Buy-Side Survey, Sample Size: 110
It is interesting to note the high level of interest in health care in spite of the low level of interest in doctors and medical professionals (Fig. 16). It seems there is currently a high level of interest in non-medical health care experts.
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PRICING AND SPENDING ON EXPERT NETWORKS
Traditionally, many expert networks charged a fixed and relatively high subscription fee to buy- side clients in exchange for either unlimited or metered access to experts. However, with market conditions causing unprecedented pressure on research budgets, there is increasing adoption of purely transactional (pay-as-you-go) pricing systems, or ‘hybrid’ pricing models that combine some fixed upfront fee plus additional billing for usage.
Currently, few buy-side clients pay on an entirely transactional basis. It should also be noted that many users of expert networks are often not knowledgeable about the costs or payment terms associated with the expert networks they use. Nevertheless, it seems clear that subscription-based pricing is still dominant in Europe, accounting for 57% of clients in that region. Meanwhile, only 34% clients in North America report paying a fixed subscription rate. 46% of North American users report being charged according to a hybrid pricing model, involving both transactional and subscription fees. 20% of North Americans report using a transactional payment model for their expert networks, while less than 10% of European users report the same.
How do your current expert networks charge you for their services?
Figure 15, Source: Integrity Research Buy-Side Survey, Sample Size: 99
As transactional or ‘pay-as-you-go’ pricing typically leads to reduced costs for the customer, this may serve as further evidence of the maturity of the expert network market in North America.
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What type of pricing model would you most prefer?
Figure 16, Source: Integrity Research Buy-Side Survey, Sample size: 101
It is also clear that there is a preference among a significant number of users for a more transactional-oriented pricing system (34%), while many others claim to be indifferent between a subscription and a transactional pricing model (42%). The preference for transactional pricing is considerably stronger in North America compared to Europe (37% to 21%), while European users are much more likely to be indifferent than their North American counterparts (53% to 37%).
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There is a widespread lack of transparency regarding the actual cost of expert network services, with a majority of end-users not being aware of the total cost of expert network services.
Approximately how much does your firm currently spend on expert network services annually?
Figure 17, Source: Integrity Research Buy-Side Survey, Sample Size: 110
However, in spite of the overall lack of clarity regarding total spending on expert networks, analysts and PMs are aware that research budgets are tight – the majority of users report that budgets have either shrunk or stayed the same over the last 12 months. In fact, 30% of all users report that their spending on expert networks declined over the past 12 months, while only 21% say that these budgets actually increased over the past 12 months.
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How has your spending on expert networks changed in the last 12 months?
Figure 18, Source: Integrity Research Buy-Side Survey, Sample Size: 110
It would seem that long only firms have been particularly squeezed in terms of their spending on expert network services. 32% of long only funds reported a decrease in spending over the last 12 months, and only 14% reported an increase. Meanwhile, 31% of hedge funds increased their spending, compared to 26% of hedge funds that decreased.
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PAYMENT METHODS
Based on our survey, a majority of buy-side firms pay for expert network services either through soft dollar commissions (28%), or some combination of soft dollars and hard dollar / cash payments (33%). European funds were considerably more likely to pay with hard dollars than soft; the situation was reversed among North American funds.
What best describes how you pay for expert network services?
Figure 19, Source: Integrity Research Buy-Side Survey, Sample Size: 110
CONCERNS AND COMPLAINTS ABOUT EXPERT NETWORKS
In our conversations with the buy-side, we found that long only and hedge fund investors displayed a markedly different set of issues with their existing expert network providers:
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Hedge fund investors typically were most concerned with the uniqueness of the experts they receive access to. There was a widespread worry that some of the large expert network firms were providing access to ‘generic’ experts, whose insights have already been widely shared and therefore possess little informational alpha.
On the other hand, long only investors were most likely to identify a lack of sufficient coverage, slow turnaround times, and the perception that experts may be providing a ‘biased’ or ‘unreliable’ or ‘non-objective’ point of view.
Furthermore, some long only investors shared the concern that expert networks were too oriented towards providing short-term insights rather than a long term outlook.
These answers reflect the difference in hedge fund and mutual fund research methods. Long only analysts are concerned with a developing a long-term well-supported view of a company or a sector. To accomplish this, they are more interested in an expert network that provides deep coverage and convenient access to a large number of unbiased experts on an ongoing basis. The ‘uniqueness’ of an expert is apparently less important than their overall, objective quality.
Hedge fund investors on the other hand are less concerned with breadth and depth, and are more hungry to find individual experts who are exceptionally high-caliber and unique. They are less concerned about comprehensiveness, and more likely to favor custom recruitment of experts that no one else has access to (see page 27 above).
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THE NON-USER’S PERSPECTIVE
Integrity also interviewed 20 buy-side firms that do not currently use expert networks, although many of them have used expert networks in the past. Most of the previous users (60%) stopped using expert networks due to budget considerations.
If you have previously used expert networks, what made you stop?
Figure 20, Source: Integrity Research Buy-Side Survey, Sample size: 20
Non-users continue to cite budget concerns (38%) alongside other issues for their avoidance of expert network services. No respondents selected compliance concerns as reasons for non-use.
Are there any specific reasons why you do not use expert networks?
Figure 21, Source: Integrity Research Buy-Side Survey, Sample size: 20
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In addition, 76% of non-users do not expect to begin using expert networks in the next 12 months. This may indicate a certain level of market saturation for expert networks, at least among buy-side clients in Europe and North America. It may be concluded that almost all of the hedge fund and mutual fund users who are likely to be interested in using expert networks are already using them, and the remaining non-users are likely to be much less likely to adopt expert networks. However, it should be noted here that this question does not reflect non-users in the Asia-Pacific region, where market penetration for expert networks is considerably lower.
Do you think you might use an expert network service within the next 12 months?
Figure 22, Source: Integrity Research Buy-Side Survey, Sample size: 20
While budgets at non-user firms may vary, it should be noted that the ongoing pressure on expert network pricing, and a shift towards a more transactional pricing system, could encourage those firms for whom pricing is a major concern to give expert networks another try.
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OUTLOOK FOR THE EXPERT NETWORK INDUSTRY
Overall, Integrity Research Associates expects the following factors to have the most significant impact on expert networks over the next 12-24 months:
Compression of research budgets due to difficult market conditions. Compression of margins (pricing pressure) due to increased competition from new entrants and aggressive expansion by existing players. Increased demand for transparent, convenient transactional pricing models from buy- side clients monitoring their research budgets. An increasing share of business coming from corporates, private equity firms, sell-side brokers and investment banks, and consulting firms. Opportunities for growth in Asia and the Emerging Markets. Flat or negative aggregate spending from large buy-side accounts as they “right size” their budgets for this type of research. Account churn caused by buy-side firms becoming more pro-active in managing their relationships.
Based on our survey, the majority of buy-side accounts do not expect to increase the number of expert networks they use in the next 12 months. Only 14% of hedge funds and 9% of long only investors expect to increase the number of expert networks they use over the coming 12 months. This compares to 2% of hedge funds and 3% of long only investors who expect to reduce the number of expert networks they use over the coming 12 months. This reflects a market that is currently in a holding pattern, with most clients unwilling to fire their providers but not being particularly interested in increasing the number of firms they work with.
Do you expect the number of expert networks you use to change in the next 12 months?
Figure 23, Source: Integrity Research Buy-Side Survey, Sample size: 116
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Although the overall number of expert network vendors used by most buy-side clients may remain the same, this does not rule out the possibility of some degree of ‘churn’ taking place – with buy-side firms replacing some of their existing expert networks with providers that offer more attractive pricing or other advantages.
In addition, most participants in our survey do not expect their actual usage of expert consultations to increase in the next 12 months; however, the outlook for usage is considerably more positive than the outlook for adding new providers. As you can see from the chart below 33% of hedge funds and 13% of long only investors expect to increase the number of consultations they conduct over the coming 12 months. This compares with 9% of hedge funds and 1% of long only investors who expect to actually reduce the number of consultations they conduct over the coming 12 months. When we last conducted this survey, in 2007, 28% of hedge funds and 29% of mutual funds planned to increase their usage of expert networks. It appears that mutual funds have become considerably more conservative about their expectations in the last 2 years.
How do you expect your total usage of expert networks to change in the next 12 months?
Figure 24, Source: Integrity Research Buy-Side Survey, Sample size: 116
In addition, 77% of all buy-side firms interviewed expect their spending on expert networks to remain flat. However, 22% of hedge funds expect to increase their spending on expert networks in the coming 12 months while only 5% of long only investors expect the same. 11% of hedge funds expect their spending on this type of research will fall in the coming 12 months compared to 12% of long only investors who see a similar result over the next year.
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How do you expect your total spending on expert networks to change in the next 12 months?
Figure 25, Source: Integrity Research Buy-Side Survey and Estimates 2009, Sample size: 85
Given all of the preceding factors, Integrity Research expects revenues for the expert network industry as a whole to fall by approximately 15% in 2009, to $364 million.
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Expert Network Market Share, 2009 (est.)
Figure 26, Source: Integrity Research Buy-Side Survey and Estimates
We expect Gerson Lehrman’s market share to fall from 65% to 62%, as firms like Guidepoint Global, DeMatteo Monness, and Coleman Research continue to compete aggressively for Gerson’s customers.
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EXPERT NETWORK MARKET FORECAST
Integrity expects expert network revenues to fall sharply (-15%) in 2009 compared to 2008. We expect a mild reovery to begin over the next two years, with annual growth rates hitting 7.5% by 2012, and exceeding 2008 revenue levels by 2013.
Expert Network Market Forecast – 2010-2014
Figure 27, Source: Integrity Research Buy-Side Survey and Estimates
SUMMARY OF MARKET OVERVIEW FOR EXPERT NETWORKS
The expert network industry bears many of the hallmarks of an overcrowded market. The stunning success and healthy profit margins gained by some of the early movers, such as Gerson Lehrman, has attracted a large number of new entrants eager to replicate their success. These new entrants will be competing aggressively on both price and service, and will attempt to differentiate themselves by advertising their areas of specialization.
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Most expert network providers are experiencing additional pressure from overall financial market conditions. In response to tightening research budgets, buy-side clients will be looking more closely at the price they pay for expert network services and at the specific vendor relationships they choose to maintain. Our buy-side survey indicates that pricing pressures are likely to be tougher in the US than in Europe. In the long term, pressure from both customers as well as competitors is likely to lead to reduced profit margins for the industry.
We noted in last year’s ResearchFocus report that the barriers to entry into the expert network market are quite low. However, the larger players are not entirely vulnerable. There is a certain degree of inertia that ensures that clients will continue to do business with the firms that they are most used to working with – even if at a somewhat more competitive pricing level. Clients who have already used a firm for many years are unlikely to suddenly jump ship and simply dispose of all the relationships they have built with their expert network provider.
Furthermore, the larger players, which had the opportunity to accumulate healthy cash flow during the boom years, are now able to invest in technological systems, compliance processes, and customer service – all areas where new entrants find it hard to compete. While a small startup in this environment may be able to develop an adequate technology platform and provide high quality service to a small group of clients, it is going to be much more difficult for them to rapidly scale their tools and processes.
Existing client relationships, distribution arrangements, technology, and scalable systems will enable the handful of very large expert network firms to maintain a meaningful moat around their business. They can further strengthen their competitive position through mergers and acquisitions – as, for instance, the recent acquisition of Vista Research by Guidepoint Global and Gerson's purchase of TGR Research in Paris.
Thus, while the industry as a whole may expect tighter profit margins in the future than they have seen in the past, one should not count out the large expert network firms. Although they will face increasing pricing pressure in their core market (large buy-side accounts), they are well positioned to maintain their leadership position, and are also diversifying into other markets like corporations, private equity, consulting firms, and other less traditional users of expert networks. Furthermore, we perceive a very positive opportunity for expert networks in Asia, where the market is, statistically speaking, largely untapped.
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SECTION III - EXPERT NETWORKS AND COMPLIANCE
This section provides an overview of compliance practices, policies, and systems at leading expert network firms, and also provides Integrity’s recommendations for best practices in each area of compliance.
In measuring customer perception of compliance strengths at various expert network firms, it was clear that most analysts and portfolio managers are not overly concerned or informed about this issue. Integrity believes that investment in compliance systems and processes, of the type outlined by our recommended best practices, may be seen as a requirement in order for an expert network to be credible players in the industry. Based on Integrity’s Compliance Ratings, we see Gerson Lehrman Group as the top ranked U.S. expert network provider on compliance issues, followed by Coleman Research Group, and Guidepoint Global. Among non-US based firms, we consider Evalueserve’s compliance practices to be the strongest, followed by Cognolink and Nemo.
The expert networks evaluated in this report are, by and large, unregulated businesses that intermediate the transfer of information and insight about markets, industries, and companies to financial services firms. They do this by connecting financial services firms to individual experts who may or may not be employed by publicly traded companies or other organizations.
The primary risk with the conversations between experts and investors is the transfer of material non-public information, better known as inside information. Each of the constituencies – financial services clients, individual experts, and entities that employ experts, as well as the expert network firms themselves – assume risk from participating in the expert networks, and a well-designed compliance system helps to protect all parties involved from legal and regulatory risks.
The insider trading prosecutions of employees at Galleon and Pequot illustrate the risks posed by accessing material non-public information. In both cases it appears that any access to material non-public information was made through informal networks developed by those being prosecuted, not through firms specializing in providing access to experts. Nevertheless, these two cases illustrate the rationale for a robust compliance infrastructure.
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In recent years, the leading expert network firms have implemented stricter controls and systems to reduce risk that participants will access material non-public information. However, compliance risks still remain. This section presents an overview of our recommended best practices for the industry, and our assessment of how firms are currently handling the most pressing compliance issues.
STAKEHOLDERS
There are three constituencies in any expert network transaction – the expert, the expert network firm, and the client. Each has their own compliance needs and priorities.
Expert network firms need compliance policies and procedures that protect them from accusations of being a party to leaking material non-public information or the breach of fiduciary duties. Experts need compliance policies and procedures that protect them from being placed in a situation where they are pressured to disclose material non-public information or breach fiduciary duties. Clients such as hedge funds and asset managers need compliance policies and procedures that prevent them from being a recipient of material non-public information or being the target of legal or regulatory action over the breach of fiduciary duty.
An appropriate compliance system minimizes the overall risk of lawsuits and regulatory action while placing responsibility for each stage of compliance where it belongs. Such a system makes use of policies that clearly provide guidance to each participant, business processes that help to ensure that compliance terms are being met, and software tools that enable users, experts, and expert network employee to more easily manage the risks.
WHAT ARE THE MAJOR COMPLIANCE RISKS?
We asked general counsels, chief compliance officers, and other senior management at expert network firms about what they saw as the greatest compliance-related risks for their industry, and how they handle these risks. Here are some of the responses from 20 expert network providers that agreed to participate in our survey, in their own words:
“The greatest compliance risks faced by the expert network industry are breaches of confidentiality, insider dealing and conflicts of interest. We make these points clear when pre-qualifying specialists and with a strict compliance framework hope to minimize/eliminate these risks.”
“An expert network that does not have a well-developed compliance program could create reputational risk for the entire industry.”
“Being sloppy on compliance could threaten the entire industry in the long run as it creates publicity that causes corporations to prohibit employees from participating in consultations.”
“Misinformed experts. It is vital that each and every expert understand and abide by the rules prohibiting them from disclosing inside information.”
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“The greatest compliance risk is conflict of interest. Experts should always review and confirm that they can discuss a topic before consultation with a client. Clients should inform us of their specific areas of interest before soliciting an expert for that topic.”
“The main risk is clients and the industry being tarred with the same brush as competitors that are less focused and less competent on these issues than we are. Clients could be tainted by association with questionable practices of the myriad expert network firms that arrange expert consultations without any compliance procedures and systems.”
“The single greatest risk is a determined bad actor seeking to gather or disseminate material non-public information. Our adherence to a strict compliance regime is intended to minimize, to the extent possible, that risk.”
“Clients should establish, monitor and audit their own compliance policies rather than holding expert networks responsible should anything go wrong. We can provide the client with tools to implement their policies.”
“Many expert network providers are brokers of experts and not information. As such – the people making the connections may have no insight or understanding about what takes place in a conversation. It is relatively easy to get around controls on the transfer of material non-public information when expert network staffers are not familiar with the industry or the topic at hand. It’s necessary to have a deep understanding of the industries you provide experts in and what experts are saying. This lowers the risk of compliance violation because there is transparency around the topics of discussion.”
“New shops not adhering to industry standards can use their lack of compliance as a selling point to clients – by encouraging unscrupulous behavior, they pose a threat to the survival of the industry.”
“In our opinion, Reg FD eliminated using employees of public companies as experts unless they are the defined contact of the company. Continued use of public company employees by expert networks poses a major risk, and could lead to legal/regulatory consequences.”
“Before 2008, there was very little interest among financial clients in speaking to government experts. Now, there is increased demand for policy insight from investors, and firms have sprung up to meet that need. This demand is, for the most part, completely legitimate and understandable given the extent of recent government participation in the economy and financial markets. However, those who serve as intermediaries in the business of connecting investors to policymakers face enormous risk of reputational damage if they are perceived to be part of a kickback and influence-peddling scheme.”
“As a non-US-based firm with US clients, the greatest challenge for us is to have US-based investors who are speaking to non-US-based experts operate with the same set of rules and expectations, so that neither party commits any violation of their respective home country’s laws. Different corporate / financial cultures and language barriers create room for confusion about what constitutes acceptable behavior. We need to be wary of attempts to take advantage of ‘regulatory arbitrage’.”
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“1. Lack of personal integrity amongst research staff, experts and clients. 2. Controlling clients that are interacting directly with experts in un-moderated phone calls. 3. Hackers accessing confidential information gleaned by research firms and using it illegally.”
COMPONENTS OF COMPLIANCE
A well-designed compliance system makes use of three complementary approaches:
Policies: These are the legal terms and conditions and compliance manuals which set out the rules of the road for all of the parties involved. Policies should clearly state the responsibilities and rights of each party involved in an expert network transaction, and provide guidelines for what constitutes acceptable behavior. These policies are usually designed with the help of outside counsel.
Processes: These are business processes, training modules, and “best practices” which operate on a day-to-day basis to make sure that the policies are being followed. Processes may include internal checks with compliance officers, maintaining audit trails, requiring positive affirmation from experts that they have no conflicts of interest with regard to a specific consultation, and generally building and encouraging a strong commitment to an internal culture of compliance within an expert network firm.
Tools: This refers to software that helps expert network staff and buy-side compliance officers more easily implement their required policies and processes. Capabilities may include software tools that automatically flag conflicts of interest, track employment status, set screening criteria for projects, blacklist certain types of experts, etc. These tools are necessary for an expert network’s own staff to keep track of compliance requirements; in addition, they may also be extremely helpful to buy-side compliance officers who desire to implement their own screening criteria and other policies.
Although different expert network firms tend to emphasize different aspects of compliance, depending on where they happen to have particular strengths, we believe that, in a well- designed compliance system, all of these components work together: policies lay out the rules of the road, consistent and rigorous business processes ensure that the policies are being followed on a day-to-day basis by all involved parties, and software tools make it easier for a firm’s policies to be followed.
The following section reviews the most important policies, business processes, and tools that we believe should to govern and manage the relationships and responsibilities of the experts, the clients, and the expert networks themselves. Our suggestions form a set of “Best Practices” for the expert network industry. The purpose is to provide a checklist for buy-side compliance officers evaluating their current or prospective expert network providers.
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GENERAL PRACTICES
In general, expert networks should:
Have detailed conflict resolution procedures to ensure that all experts have a mechanism to refuse to answer client questions and to report client questioning that the expert feels might be in violation of any ethical, legal, regulatory, and contractual obligations or constraints they might have.
Keep complete records of all expert consultations, including name of the expert, the name of client, the topic of discussion, the time and date of the consultation, and the amount of fees paid by the network to the expert. This information should only be available to clients or regulators upon request.
Provide a regular training program for all experts, and for the network’s employees regarding the legal and ethical obligations that could potentially restrict expert participation in specific client engagements and the appropriate use of an expert network.
Allow controls reflecting the policies of employers, specifically a business process to accept and implement the policies and procedures of both public and private company employers as a filter to restrict access to those employee experts if / when appropriate.
Employ a designated compliance officer, and implement strong internal compliance policies and procedures.
Allow for controls reflecting the policies of clients, specifically a system to accept and implement the policies and procedures of various clients as an overriding filter to permit or restrict access to appropriate experts.
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RECOMMENDED COMPLIANCE POLICIES
By conducting a meta-analysis of different expert networks’ terms and conditions, we identified the requirements we believe are the most critical. Although not all expert networks may follow all of these policies, they form a set of recommended “best practices” for the industry. These are as follows:
1. No expert should be allowed to engage in any consultation that involves discussions about the company for which they currently work. 2. No expert should be engaged in a consultation with a client whose firm competes with his or her employer. 3. Any expert who formerly worked for a firm may not consult on any topic directly related to that firm for a minimum of 6 months after they have left the employ of that firm. In addition, the expert must abide by all terms of departure, e.g. non-competes, severance agreements, etc. 4. All experts must represent that the information provided as part of a consulting engagement are their own views and not those of any other individual, group or company. 5. If the expert is unsure whether he/she is able to participate in a specific engagement, he/she must decline to participate in that engagement. 6. No expert should disclose or attempt to benefit from: a. The subject matter of any projects; b. Information about any client activity; c. Information about the nature of a client’s inquiry. 7. Experts must not disclose material non-public information. 8. Experts must not disclose confidential information, discuss trade secrets, or divulge the intellectual property of any third-party. 9. Experts must not engage in any activity that might be illegal. 10. Experts must not give investment advice. 11. Additional restrictions on experts with specific backgrounds include: a. If an expert is a doctor, and he/she is involved in clinical trials, then he/she must not address questions related to those trials. b. If an expert is a doctor, then he/she must not offer medical advice. c. If an expert is an accountant, then he/she must not consult about companies that he/she has audited for a minimum of twelve months. d. If an expert is an accountant, then he/she must not offer accounting advice. e. If an expert is a lawyer, then he/she must not offer legal advice. f. If an expert is an officer or director of a company, then he/she must not consult when an IPO, merger, or tender offer is pending. g. If an expert is a government official, then he/she must avoid consulting for pay altogether in order to prevent the appearance of kickbacks.
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KEY COMPLIANCE PROCESSES
Although not all expert networks follow each one of the following business processes, these processes form a set of recommended “best practices” for expert networks that we believe will help to avoid future problems for expert network firms, experts, and clients.
1. A compliance professional should always be available internally to expert network employees, should they need guidance or advice of any sort related to compliance. It may also be necessary that they be available to clients on an ad hoc basis. 2. Upon joining an expert network, experts should be required to sign off on formal terms and conditions that outline the expert network’s policies. 3. New experts should be encouraged or required to get positive, written approval from their employers (if any) regarding participation in the network. In addition, prospective experts must review all employment agreements, company manuals, and codes of ethics to ensure that they can participate in an expert network before being enrolled as an expert. 4. Experts should confirm their ability to participate on a specific consulting engagement based on their detailed understanding of the subject of the engagement prior to being recommended for the engagement. 5. Experts should regularly renew their agreement, understanding and formally accepting all of the terms and conditions associated with the expert network they are registered with. 6. Except where they are independently employed, or receive formal endorsement from their employer, experts should be limited in the total number of consultations they can conduct, or the total amount of compensation they can earn, in order to avoid any charges that their participation in expert network consultations may create conflicts of interest with, or betrayal of fiduciary duty to, their employer. This limitation may not be the same for all experts, and may be dependent on their salary, position, and employment status. 7. Experts, expert network staff, and clients should be provided compliance training, which should be reviewed regularly. They should be given access to all compliance policies, and should have the ability to seek clarification from the expert network’s compliance officer. 8. Changes in compliance rules should be communicated promptly to both experts and clients. 9. Clients should be required to be as specific as possible when outlining an expert request. Generalized requests are more likely to lead to contact with experts who may be employed by a company the client is investigating, or have confidential information about a topic of interest to a client. 10. Information on experts’ areas of conflict should be stored systematically and made available to employees of the expert network responsible for matching clients with experts. Ideally, experts with conflicts of interest should not even appear in the results when a search is conducted on the topic where they have such a conflict.
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11. Expert network firms should cooperate to implement a standardized, industry-wide database of corporate policies with respect to expert network participation by their employees. This would help to prevent future lawsuits, reputational damage, or regulatory action if some expert networks are found to be violating clearly stated corporate policies.
KEY COMPLIANCE TOOLS
The following are a list of key software tools that enable the entire expert network compliance process to operate smoothly. Provision of these tools will assist any expert network firm interested in scaling their business. A lack of these tools may count as a negative for clients who desire a high degree of control and flexibility over their use of expert networks.
1. Buy-side clients should have the ability to ask all potential experts specific screening questions for all projects (including the ability to add specific screening questions on a project-by-project basis). Forcing consultants to answer such questions before the consultation is arranged reduces the chance of problematic consultations taking place. 2. Corporations should have a straightforward way to inform expert networks of their policies regarding engaging employees to participate in consultations with third-parties. At a minimum, expert networks need to designate a point person to handle relations with corporate entities, and this person’s contact information should be easily available on an expert network’s public-facing website. Information on corporate policies should be stored systematically and efforts should be made to connect such policies to individual profiles of experts who may be affected by them. Expert network firms which avoid making such contact information available, or who refuse to store and follow such policies, create a negative impression of expert networks as a whole. Companies which continue to receive unwanted invitations from expert networks may take the more drastic step of implementing a blanket ban on expert network consultations by their employees. The survival of the expert network business depends on maintaining positive relations with employers of experts. 3. Experts should be able to pre-screen projects; they should be provided with straightforward tools to indicate their preferences regarding topics, companies, and issues that they would be unwilling or unable to discuss with clients, and they should never be invited to participate in projects which fall under such areas. Systematically storing such data can significantly reduce the chance of problematic consultations. 4. Buy-side compliance officers should be provided with tools that enable them to monitor, approve, and block any and all pending consultations for their firm. This can be accomplished to some extent by copying compliance officers on emails when consultations are arranged. However, for buy-side firms that make use of a high volume of expert consultations, this may be overwhelming and inefficient. A web-based dashboard is preferable for such clients. 5. Buy-side compliance officers should have a way to blacklist experts based on place and status of employment. Whether handled directly by the client, or by communication between the client and expert network staff, such blacklisting should automatically flag or eliminate blacklisted experts from all searches conducted for that client. 6. Buy-side compliance officers should be provided with access to detailed, in-depth information about their staff’s use of experts. All expert networks should be ready to provide an audit trail of client usage.
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COMPLIANCE ANALYSIS
Integrity Research Associates gained insight into expert network compliance through two primary sources – the expert network firms themselves, and their buy-side clients.
1. In June-July 2009, Integrity Research sent questionnaires to 38 expert network firms requesting the disclosure of information on their compliance policies and procedures. The following firms responded to our disclosure requests:
o AlphaSights o Capvision Partners o CognoLink Ltd. o Coleman Research Group o DeMatteo Monness o Epito o Epocrates o Ergo o Evalueserve Circle of Experts o Gerson Lehrman Group o Greenwood Research o Guidepoint Global o HCRC / Wall St. Access o Maven Research, Inc. o Nemo Services Ltd. o Primary Global Research o Primary Insight o Roulston Research o Success Stories Media o Tribeca Insights
The remaining 18 firms chose not to participate for various reasons.
2. We conducted site visits with some of the leading expert network firms to gain a ‘hands-on’ understanding of their processes and systems.
3. During the 3rd quarter of 2009, we also interviewed 301 buy-side clients regarding their usage of expert networks. 120 of these buy-side professionals currently use expert networks. As part of these interviews, we asked clients to rate the compliance practices of the expert networks they currently use.
It is relatively easy for an expert network to require clients and experts to sign off on a rigorous set of terms and conditions. It is far more costly and time consuming to actively enforce compliance “best practices” in all aspects of an expert network’s operation.
We believe that in some instances, the firms which chose not to disclose their compliance practices have minimal procedures in place, and would not have scored well in our assessment.
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However, we also believe that some of the firms that did not participate in our compliance survey have reasonable compliance systems.
It should be noted that the most important source for Integrity’s understanding of compliance systems and policies is based on expert network self-disclosure. As part of this study, we did not conduct audits of each expert network. Furthermore, since compliance standards are different in non-US domiciles, we generally evaluate international (ie, non-US) firms separately from their US counterparts. Therefore, compliance rankings should not take the place of a user’s own due diligence.
We evaluated expert networks in each of four areas: policies, procedures, tools and client perceptions. We then created an overall assessment based on the scores in each area. In evaluating compliance policies, our assessments measure the extent to which expert network firms meet or exceed our set of recommended policies, as listed in the previous section.
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EVALUATION OF EXPERT NETWORK COMPLIANCE POLICIES
Based on expert networks’ responses to the various questions asked (and discussed in prior sections), we rate Gerson Lehrman Group most highly for the stringency of its compliance policies. Since our last report, Primary Global Research has adopted policies virtually identical to Gerson Lehrman’s. Coleman Research and DeMatteo Monness tie for third place. In general, US based firms did relatively well when we compared their existing policies to our recommended ‘best practices’ for compliance policies. The scores below simply measure the percentage of our recommended compliance policies followed at each expert network firm. Note that policies are the easiest component of a compliance system to implement, and have a low weight in our overall compliance ranking.
Compliance Policies Ratings - US Firms
Figure 28, Source: Expert Network Self-Disclosure and Integrity Analysis
For international (non-US-based) firms, we found that policies are somewhat less stringent than for US firms, except where, as in the case of Evalueserve, their business consists primarily of serving US-based clients.
Compliance Policies - non-US Firms
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Figure 29, Source: Expert Network Self-Disclosure and Integrity Analysis
EVALUATION OF EXPERT NETWORK COMPLIANCE PROCESSES
Compliance processes are more challenging to implement than policies. Based on our review of expert networks, we assigned ratings which measure the extent to which expert network firms have established business processes that meet or exceed our recommended compliance processes, including investment in staff and training. We believe compliance processes are the most important component of compliance and they receive the greatest weight overall in our final compliance ratings. Among US-based firms, Gerson Lehrman Group is the clear leader when it comes to their compliance processes matching up to our recommended best practices, followed by Guidepoint Global and Coleman Research Group.
Compliance Processes - US Firms
Figure 30, Source: Expert Network Self-Disclosure and Integrity Analysis
Compliance Processes - non-US Firms
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Figure 31, Source: Expert Network Self-Disclosure and Integrity Analysis
Among non-US based firms, CognoLink’s compliance processes match most closely to our recommended best practices, followed by Evalueserve and Nemo Services.
The importance of business processes and training cannot be overstated; the most rigorous policies and the most sophisticated software is of little use if the firm does not maintain adequate procedures to consistently implement them. Generally speaking, compliance processes tend to be weaker at smaller firms and stronger at more well established firms who have already encountered, and developed business practices to handle compliance risks. Developing these procedures is an iterative and difficult process and newer firms may not have thought through all of the issues as yet.
EVALUATION OF COMPLIANCE TOOLS AND SYSTEMS
These ratings measure the extent to which expert network firms provide employees and clients with Integrity’s recommended set of compliance tools, as described in the previous section.
Compliance Systems - US Firms
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Figure 32, Source: Expert Network Self-Disclosure and Integrity Analysis
Gerson Lehrman is again the leader among US firms in providing compliance tools and systems, followed by Coleman Research Group, Guidepoint Global (both of whom exceed the 80% score), and DeMatteo Monness.
Compliance Systems - non-US Firms
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Figure 33, Source: Expert Network Self-Disclosure and Integrity Analysis
Among non-US firms, CognoLink is the leader when it comes to providing clients with compliance systems and tools, followed by two other UK-based firms: AlphaSights and Nemo Services.
Generally, the major obstacle in the development of compliance tools is the cost of software development. Firms which emphasize the relational and process-oriented aspects of the expert network business have traditionally not invested as much in technology. This is not necessarily a detriment to their compliance system; different firms may have different strengths. A firm with exceptionally strong training and internal processes may offer perfectly adequate compliance protections even without developing specific tools for the purpose. However, on the whole, we believe that using software to tie compliance requirements directly to a firm’s database of experts and its relationship management software ensures a more consistent application of these requirements. For larger firms, or smaller firms hoping to scale their business, investment in such technology becomes a necessity in order to maintain consistent and rigorous compliance processes.
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CLIENT PERCEPTION OF COMPLIANCE
As discussed previously, Integrity Research surveyed 120 users of expert networks to understand how they perceive the compliance capabilities and limitations of the expert networks they use. Due to a lack of market penetration for smaller firms, not all of the firms reviewed in the preceding pages received a sufficiently large number of responses on this topic to be included in our assessment.
Client Rating of Compliance
Figure 34, Source: Integrity Research Buy-Side Survey, Sample size: 120
Although MEDACorp is the leader when it comes to client perceptions of compliance, there is not much differentiation between it and most of the other leading firms. It should be noted that clients have no natural incentive to disclose poor compliance processes at a firm they currently use. Furthermore, we interviewed analysts and PMs for whom compliance is not a major day- to-day concern; thus, a lack of strong opinions about compliance is understandable with this population. In fact, some of the users disclaimed all knowledge whatsoever of compliance systems at the expert network firms they use, thereby refusing to answer this question. As such, although this client feedback is useful, we do not feel that it is highly predictive of compliance performance at an expert network firm.
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OVERALL COMPLIANCE RATINGS
To assess the overall compliance capabilities of the key expert network providers, we created a synthetic measure that takes into account their compliance policies, processes, tools, and client feedback. Firms which are relatively new or small did not receive any meaningful client feedback in our survey were adversely affected in our overall compliance rating. The weighting of each criterion is as follows:
Compliance Policies: 25%; Compliance Processes: 35%; Compliance Tools: 25%; Client feedback: 15%.
Firms which refused to complete Integrity’s compliance questionnaire are not included in these final ratings.
Overall Compliance Ratings – US Firms:
Figure 35, Integrity Research Buy-Side Survey, Expert Network Self-Disclosure and Integrity Analysis
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As you can see from the chart above, Integrity’s overall leader for compliance among US-based firms is Gerson Lehrman which has a significant lead over other expert networks in the depth of its compliance capabilities. Gerson's strong compliance score reflects its attention to implementing robust compliance processes and its leadership in developing compliance tools for clients. Gerson was followed by Coleman Research Group and Guidepoint Global.
Overall Compliance Score - non-US Firms
Figure 36, Integrity Research Buy-Side Survey, Expert Network Self-Disclosure and Integrity Analysis
Internationally, Evalueserve is just barely ahead of CognoLink in our final ratings. Nemo Services placed third.
As we discussed previously, these compliance assessments are largely based on self-reported data from the expert networks and should not take the place of a user’s own due diligence.
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DOES COMPLIANCE MATTER?
One issue that we encountered repeatedly in our conversations with smaller expert networks is that they felt no need to invest extensively in compliance due to a lack of demand and/or interest from customers for extensive compliance features. This point of view is supported by the fact that users of expert networks did not consider compliance to be an important component of their day-to-day usage of expert networks. More advanced compliance systems do not seem have any direct relationship upon customer satisfaction.
As such, it is understandable why some firms might prefer to save money rather than invest in compliance staff, training, and systems. However, we also believe that this point of view is ultimately unsupportable. Legal issues relating to corporate policies and insider information potentially expose expert networks to lawsuits and serious reputational damage should their service be used for dubious purposes. A rational calculation of self-interest implies that investment in compliance is a necessity for expert networks in order to protect themselves, along with their clients and experts. As the regulatory status of expert networks is currently unclear, it is highly advisable for all expert networks to make an investment in compliance in order to avoid incidents that would lead to regulatory or legislative intervention.
Compliance should also be seen as an opportunity, and not just a risk. “Best-of-breed” compliance systems are an important requirement for winning business from some of the most active and sophisticated users of expert networks, including large hedge funds and asset managers. Expert networks which fail to provide a competitive level of compliance tools, policies, and procedures will not be taken seriously by these clients. Although compliance does not typically play a major role in the day-to-day usage of expert networks by analysts or portfolio managers, it is a screening hurdle used by gatekeepers to determine which expert networks will be used by their firm in the first place.
Many of the users we spoke to betrayed either indifference or lack of knowledge about compliance, given that compliance matters are often outside the purview of individual analysts at hedge fund and asset management firms. Nevertheless, they remain a much higher priority for Directors of Research and Chief Compliance Officers. Investment in offering compliance systems and processes, of the type outlined by our recommended best practices, may be seen as a requirement in order for an expert network to be credible players in the industry.
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SECTION IV - COMPARISON OF EXPERT NETWORK FIRMS
In this section, we compare the leading expert network providers in North American and Europe and identify the top performers based on each of the following nine metrics:
Match Quality Value for Money Uniqueness of Experts Compliance Depth of Coverage Customer Support Speed of Recruitment / Matching Other Services (meetings, conferences, reports) Survey Capabilities
METHODOLOGY
The ratings in this section are derived entirely from buy-side user feedback. During the third quarter of 2009, Integrity Research Associates interviewed 301 buy-side investors, including 120 users of expert network firms. These users provided 103 evaluations of expert network firms on each of nine metrics, which are discussed further in this section. The user responses are the foundation for our ratings, which are calculated as a normalized mean of the responses collected from customers. As a minimum cut-off, Integrity required that a research firm receive at least 3 customer evaluations for each metric before it was assigned a rating for that metric. This means that many smaller firms are excluded from these ratings due to insufficient survey data.
Although the vast majority of the customer feedback in the following section came from randomly dialed participants, in some cases, expert networks provided client references. We adjusted reference responses for potential bias. Also, in some instances, smaller expert networks received seemingly biased evaluations, which we adjusted accordingly.
It must be noted that, in spite of our efforts to ensure an unbiased rating, the ratings of expert network providers with large a number of evaluations (such as Gerson Lehrman, Guidepoint or Coleman Research) are often lower than the ratings of expert networks with a smaller number of voters. This could be due to one of two factors. First, the “law of large numbers” suggests that a firm with a large number of evaluations might end up with more of an average rating due to higher number of both positive and negative customer ratings it receives. However, a second reason that a firm with a large number of evaluations could end up with lower ratings than a
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smaller firm could be difficulties in providing the same level of attention and high touch customer service as smaller competitors.
The majority of the users interviewed by Integrity are located in North America and Europe. Unfortunately, we were unable to gain significant customer feedback from expert network users in the Asia-Pacific region. We nevertheless present a discussion of Asian expert network providers in our Top Picks section.
Expert Network Popularity
The following chart shows the final share of responses gained by each expert network in our buy-side survey:
Figure 37: Expert Network Popularity, Sample Size: 103
As might be expected from its dominant market share, Gerson Lehrman was the most popular firm in our survey. Compared to last year’s report, the major gainers in popularity are Guidepoint Global and Coleman Research. Guidepoint Global (formerly known as Clinical Advisors) benefited greatly from its acquisition of Vista Research from S&P. Several clients who would have evaluated Vista previously are now users of the combined Guidepoint-Vista service. Coleman Research Group has also improved its market share considerably since our last report.
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IMPORTANT FACTORS IN SELECTING AN EXPERT NETWORK
We asked buy-side participants in our survey about the factors that mattered most to them when selecting an expert network to work with. Users assigned scores between 0 and 5, with 5 indicating ‘extremely’ important, and 0 indicating ‘not important’ – to each of the 9 factors below. The cumulative scores (ie, sum of all scores received from buy-side survey participants)
for each factor are displayed in this chfcart:
Important Factors in Selecting Expert Networks Figure 38, Factors in Selecting Expert Networks, Source: Integrity Research Buy-Side Survey, Sample Size: 103
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Match Quality
In order to rate firms on the quality of their expert matching (and the resulting conversations), we asked each of the expert network users we interviewed to estimate the percentage of successful expert matches generated by their expert networks. This percentage score was then translated into a rating between 1 and 5 to enable easier comparison with other metrics. For instance, if a user estimated that 60% of the experts recommended to them by an expert network led to successful, high value consultations, we converted the response to a rating of 3 out of 5.
The percentage of successful matches is one of the most important metrics for expert network users. Scores above 70% (3.5 on the 5 point scale) are exceedingly difficult to attain, for a variety of reasons, not all of which reflect on the expert network. The ability of networks to source well-screened, quality experts is the primary driver of successful matches, but sometimes client vagaries can complicate the process. Some examples of these complications include requirements that alter during the course of an engagement, inexperience in interviewing experts, and a lack of specificity in defining experts required. However, since all expert networks are subject to the same client issues, match quality remains a key metric.
This chart, and all other charts in this section, are color coded to indicate where the firm falls in our categorization: Global Generalist, European Specialist, Healthcare Specialist, and Technology /Telecom Specialist.
Expert Network Match Quality
Figure 39: Expert Network Match Quality, Source: Integrity Research Buy-Side Survey, Sample Size: 103
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Sweden-based Epito performed extremely well on Match Quality. Among US-based firms, Coleman Research, Reuters Insight, and MEDACorp were standout performers. In Europe, CognoLink was runner-up to Epito.
Users overwhelmingly chose Match Quality as the single most important metric when they consider working with different expert networks. As such, this metric plays a very important role in our overall top picks ratings model (see Section 5). In general, firms that performed the best on this metric are those that retain a “custom recruiting” business model, emphasizing close relationships with customers and a bespoke research process.
The percentage of successful matches does not seem to be highly correlated with the size of the expert network. Larger firms such as Coleman Research and MEDACorp received good scores, whereas Primary Insight, a small to medium firm, received the worst score.
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COST EFFECTIVENESS
The affordability of expert network services has become an increasingly important issue over the last two years, as commission budgets have shrunk. In general, during a bull market there is relatively little concern over pricing issues. However, in the third quarter of 2009, “Cost Effectiveness” was identified by users as the second most important factor in selecting an expert network, immediately after “Match Quality”.
Cost Effectiveness of Expert Networks
Figure 40: Cost Effectiveness, Source: Integrity Research Buy-Side Survey, Sample Size: 103
In addition to the extraneous factors – market turmoil, budget cuts, and investment losses – that have led to greater price sensitivity, there are forces intrinsic to the market for expert network services that have had the same effect. In the early days of the expert network business, when there were only a handful of major players, the leading expert networks could effectively name their own price. However, over the last few years, an increasing number of new players have entered the market – the total number of expert network firms has more than doubled in just the last 3 years. This growth in the number of providers has forced some of the more well-established players to become more flexible on pricing. On the whole, this dynamic has had the effect of letting clients know that they have alternatives, and encouraging them to be more sensitive to the price they pay in a competitive market for expert network services.
Epito gained the overall highest rating for cost-effectiveness. Among U.S. providers, Coleman Research was the top ranked firm, with DeMatteo Monness, and MEDACorp also performing well on this metric.
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UNIQUENESS OF EXPERTS
In order for an expert’s information to lead to a meaningful advantage, it is necessary that the expert’s insight is not widely disseminated to other investors. If an expert’s viewpoints on a topic are well known, it is highly likely that this has already been priced into the market. As such, it is necessary to not only find experts who have accurate and meaningful knowledge, but also to ensure that their knowledge has not been widely disseminated. While it may be desirable to speak to widely known experts in order to gain an understanding of the consensus, it is generally perceived by clients that they are more likely to gain an investment edge by speaking to experts who do not reflect the consensus view, and to whom other investors do not have access.
This presents an interesting paradox. Insofar as unique experts are seen to be more valuable, they are likely to be in-demand and sought after by a large number of clients. Unfortunately, as these experts conduct more consultations, they lose their uniqueness. The search for informational alpha requires an expert network to maintain a highly active approach to expert recruitment and sourcing in a never-ending effort to stay ahead of the consensus.
Uniqueness of Experts
Figure 41, Expert Uniqueness Ratings, Source: Integrity Research Buy-Side Survey, Sample Size: 103
Among US-based firms MEDACorp, Guidepoint Global, and Coleman Research all performed very well when we asked clients to rate the uniqueness of the experts they provide. European expert network provider Epito was the standout performer among non US-based firms.
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DEPTH OF COVERAGE (SPECIALIZATION IN RELEVANT INDUSTRIES AND REGIONS)
Many expert network firms prominently advertise the number of experts in their network – the higher the number, it is assumed, the more depth there is to a firm’s coverage. However, these numbers are hard to verify independently, and may frequently be inflated for marketing purposes.
More importantly, the total size of a network does not tell us anything about a firm’s ability to actually make use of that network to provide relevant, in-depth matches for clients. For example, a firm which has tens of thousands of experts officially “in” their network, but only regularly makes recommendations from a limited pool of experts, may not be perceived by clients to have as much depth of coverage as a firm with only 10,000 experts that regularly makes recommendations from the entire pool.
Consequently, we believe client feedback is a more effective way to measure an expert network’s actual depth of coverage. It should be noted that these ratings measure depth of coverage in the areas of interest to the client, and have no relation to breadth of coverage – for instance, MEDACorp provides deep coverage of healthcare for its clients, but its network is quite narrowly focused on a single sector. MEDACorp is the overall leader for coverage depth among US expert network providers, followed by Gerson Lehrman, Coleman Research, and DeMatteo Monness. Clients saw Epito as having the deepest coverage for non-US expert networks.
Depth of Coverage
Figure 42, Depth of Coverage Ratings, Source: Integrity Research Buy-Side Survey, Sample Size: 103
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CUSTOMER SUPPORT
The Customer Support rating measures the responsiveness, helpfulness, and overall quality of the support personnel assigned to client accounts by expert network firms. Except for a few firms, like Gerson Lehrman, which have developed sophisticated web-based interfaces for their expert network, the vast majority of expert network transactions are initiated and managed through personal interactions between clients and expert network staff.
In a typical expert network transaction, there may be a single account manager assigned to a particular client, who hands off client requests to a research manager (or project manager) who is tasked with managing the recruitment and matching process. The account manager’s responsibility is to be extremely knowledgeable about a client’s unique preferences and needs, and to help the client define the project successfully; the project manager has the responsibility to be knowledgeable about the specific industry, sector, or geographic vertical that the project is focused on, and to promptly turn around a project with recommendations of valuable experts.
Customer Support
Figure 43: Customer Support, Source: Integrity Research Buy-Side Survey, Sample Size: 103
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Our Customer Support rating attempts to capture information about the quality of all of these human interactions. In addition, clients may need additional support on legal/compliance issues, billing, or technical support – all of which have an effect on the Customer Support rating.
MEDACorp, DeMatteo Monness, and Primary Global Research, are the leading performers for customer support among US-based firms. Epito and CognoLink are standouts among non-US- based firms.
SPEED OF EXPERT RECRUITMENT / MATCHING PROCESS
In an active market, the search for unique, insightful, high-value experts must be balanced against the time required to find them and to set up consultations. If an expert network takes too long to find exactly the right expert for the client’s needs, they may find that the client has moved on to other topics – or, in fact, that the market itself has moved on, and has already rendered moot the issue under investigation.
When we asked clients to rate whether a “fast match” or the “right match” was more important to them, the votes were roughly evenly split. The fact is that most clients are looking for both speed and quality, and a slow matching process may significantly detract from the value of a high-quality expert. As such, the speed of expert matching is an important variable in determining the overall value of an expert network’s service.
Speed of expert recruitment / matching process
Figure 44: Speed of Expert Matching Process, Source: Integrity Research Buy-Side Survey, Sample Size: 103
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For US-based firms, MEDACorp, Coleman Research Group, and Gerson Lehrman were the top performers when we asked clients to rate the matching/recruiting speed of expert network services. For non-US-based firms, Epito performed very well.
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SURVEY CAPABILITIES
An increasing number of expert network providers have launched formal survey capabilities, enabling clients to easily survey a sample of experts in their network. In general, the rate of uptake for such survey tools is quite low – where they are available, only a small fraction of clients have made use of them. Surveys rank well behind traditional phone consultations, in- person meetings, and written reports as preferred ways of engaging experts. There are various reasons for this, having to do with the perceived difficulty of survey design, the need to deal with biases and sampling issues in survey results, and the perception that surveys generally have a rigid, restricted question-and-answer format that does not allow for follow-up questions or in- depth discussions. As such, the majority of buy-side analysts and portfolio managers we spoke to did not make use of surveys.
It is important to note that the use of the word ‘survey’ is somewhat ambiguous. In some cases, an analyst who holds direct qualitative conversations with a dozen or so experts may consider that he has completed an informal “survey” of experts. On the whole, such informal surveys are more popular with the buy-side than formal, quantitative, statistically predictive surveys. Accordingly, the survey capability ratings below may refer to the ease with which expert networks help analysts put together such informal surveys – as opposed to more formal and rigorous quantitative surveys, which are, at this point, less frequently used.
Survey Capabilities
Figure 45: Survey Capabilities, Source: Integrity Research Buy-Side Survey, Sample Size: 103
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Among US-based expert networks, MEDACorp is the standout leader for survey capabilities, followed by Reuters Insight, Coleman Research Group, and Guidepoint Global. Of these, it should be noted that Coleman does not actually offer any formal quantitative survey capabilities. Gerson Lehrman, which has recently rolled out a sophisticated custom survey platform, ranks fifth.
OTHER SERVICES
The “Other Services” rating attempts to capture the quality of all services offered by expert networks apart from traditional consultations and surveys. Primarily, this refers to written reports, conferences, in-person meetings, and other forms of access to experts.
Other Services
Figure 46: Other Services, Source: Integrity Research Buy-Side Survey, Sample Size: 103
It is no surprise that US-based MEDACorp is the top provider for other services. As a leading healthcare investment bank, they are in a unique position to offer conferences, roadshows, meetings, seminars, management access, etc. In fact, for many MEDACorp clients, these services may be more valuable than the traditional expert consultations offered. Gerson Lehrman, in second place, offers a range of meetings, blogs, project management tools, and other services that are value added on top of traditional expert consultations. Reuters Insight and Primary Global both have a ‘push’ model, whereby they regularly provide clients with written reports and analytical notes on investment topics, based on expert input. Primary Global also acts as an agency broker, and a push model is particularly well suited for a firm interested in generating trade flow. Epito was the top Non-US expert network based on this metric.
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SECTION V – TOP PICKS
In this section, we highlight the 2009 Top Picks for Expert Networks in a range of different categories, as follows:
Global Generalist: Coleman Research Group Healthcare Specialist: MEDACorp Technology Specialist: Primary Global Research European Specialist: Epito
We also highlight a number of other interesting firms to consider in these categories, as well as some of the leading expert networks that specialize on the Asia-Pacific region. The section below explains the methodology and analysis behind these top picks.
THE 'TOP PICKS' METHODOLOGY
Integrity Research's 2009 Top Picks for Expert Networks are based on a scoring model developed from the survey responses received from expert network users. Model scores were weighted based on the importance users placed on the factors used to select expert networks, as outlined in the previous section.
The weights applied to each metric are consistent with the importance given by users, with one important exception: compliance. We have given compliance a higher weighting than would be expected from the survey data. There are two primary reasons for this difference.
Integrity’s survey universe consisted entirely of portfolio managers and buy-side analysts. These individuals are most interested in making use of expert networks to find high quality insight and information. Compliance is viewed by many analysts and PMs as a necessary evil -- a formal legal requirement that must be satisfied in order to use interesting and valuable research sources. Survey participants tend not to focus on the degree and strength of compliance practices at an expert network firm, leaving that to compliance staff or management.
Integrity believes that compliance needs to be weighted more heavily in any evaluation of expert networks. Since the aim of this report is to provide a ‘buyer’s guide’ for expert network services, we believe that in the initial process of selecting an expert network, a provider’s compliance system needs to be evaluated quite rigorously in order to ensure that compliance issues are unlikely to arise.
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Thus, based on the customer feedback, and our own emphasis on compliance, we assigned the following weights to each of the different ratings criteria:
Criterion Weight Match Quality 10
Cost Effectiveness 8
Uniqueness of Experts 7
Compliance 7
Depth of Coverage 7
Customer Support 5
Speed of Recruitment / Matching 5
Other Services (meetings, conferences, 3 reports)
Survey Capabilities 1
On top of this quantitative ranking, we placed an overlay of our analysis of each firm’s strengths and weaknesses, and qualitative customer feedback, which was taken into account in determining the top picks. As this is intended to be a buyer’s guide, firms which did well in terms of customer feedback but were no longer actively marketing their services or signing new clients were excluded from consideration for Top Picks status.
The following pages contain the 2009 Top Picks for Expert Network firms in each of the following ratings categories:
Global Generalist European Specialist Technology Specialist Healthcare Specialist
We were unable to collect a sufficient amount of survey responses to select an expert network specializing in sourcing experts in Asia Pacific, but we nevertheless review some of the leading players in the space.
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TOP PICKS: GLOBAL GENERALIST
The following table highlights the leading performers among the expert networks which provide global, cross-sector coverage. These firms represent Integrity's 2009 Top Picks for Global Generalist:
Firm
Coleman Research Group Gerson Lehrman Group DeMatteo Monness
Top Pick: Coleman Research Group
A surprise winner, Coleman Research scored well on the various factors that expert network users rated most highly. Coleman Research received a very strong score (2nd overall, 1st among Global Generalists) for its match quality, and customers comment that Coleman is highly adept at finding the right expert who may not be on other firms’ networks. Customers were also favorable about the cost of services, the speed of matching, the quality of matches, and the depth of Coleman’s expert database.
Customers comment that Coleman has been working to expand its global coverage, although the strongest network of responders remains in North America. Clients were particularly positive about the customer support they received, noting the friendliness of Coleman staff and the relationships they build with clients.
On the other hand, some customers were dissatisfied with the extent of Coleman’s global reach and relatively small network size compared to other global generalists. Coleman has recently expanded its market share, and we estimate that it is currently among the 4 largest expert network firms in the world. Customers also commented that Coleman’s compliance systems need to be upgraded, and several customers said they would prefer more flexible payment terms or business arrangements.
Coleman received a very significant number of votes in our survey, a sign of its increased market share in recent years. It remains to be seen whether the firm can scale its customer service capabilities and compliance infrastructure to keep up with its recent growth.
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Runner Up: Gerson Lehrman Group
Gerson Lehrman Group (GLG) is by far the largest company in the expert network space, in terms of revenues, name recognition, the number of existing experts in its network and services offered. Gerson Lehrman received the most responses from the buy-side investors surveyed in our 2009 study of the expert network industry.
The runner-up in the Global Generalist category in our 2009 Expert Networks study (following a Top Pick status in our 2008 study), Gerson Lehrman is the #1 expert network by any commercial measure. The metric where Gerson performs best is compliance, where the firm is rated first, significantly higher than any competing firm. Gerson Lehrman has made substantial investments in building an impressive compliance system, backed up by highly trained compliance staff and rigorous procedures, which has set the market standard for others to emulate.
Gerson garnered an excellent score (2nd overall, first among global generalist firms) for its depth of coverage; which reflects the scope of Gerson’s network. Clients commented favorably on the size and breadth of Gerson Lehrman’s network, particularly internationally – in areas like South America and across Asia – and in core competencies like healthcare and technology. Gerson’s client service team was also rated highly. GLG also garnered a 3rd place rank in Speed of Matching, 4th place rank in Customer Support, and 2nd overall for Other Services.
Gerson Lehrman’s overall score was hurt by a low score on match quality, which is the most important metric to users of expert networks. Gerson ranked ninth out of the ten firms that were rated in this category. Clients noted that, on average, slightly less than 60% of the calls set up by GLG turned out to be of high quality. Anecdotally, clients have told us that in the past they experienced higher percentages of successful matches using Gerson's network. It may be that Gerson over the past few years let smaller players out-hustle them. Another possible explanation for the low match quality score is compliance. Gerson's compliance framework excludes certain experts altogether and limit some types of experts on some types of projects, which may affect client ratings of "match quality."
Other client complaints about Gerson Lehrman included several relating to pricing issues – both the absolute level of pricing as well as the flexibility of Gerson's pricing model. Several clients found pricing by vertical or by region “unacceptable” or “problematic”. Other clients complained that GLG’s experts were “watered down”, “generic”, or “commoditized”, and that it was hard to find knowledgeable experts through GLG that competitors had not already spoken to. A few clients complained about issues with customer management and the sales team (although, overall, GLG was rated very highly for customer service), and noted that GLG’s research managers at times appeared not to be very knowledgeable about the subject matter at hand. Since the survey began, Gerson has independently launched initiatives to refine its search
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algorithms, provide custom recruiting to all its clients and to flag the unused experts within its network.
Honorable Mention: DeMatteo Monness
Founded in 1997 by Joe DeMatteo and Bill Monness, DeMatteo Monness LLC is an expert network research shop which is organized into trading, research and sales departments and has offices in North America, Asia and Europe. The firm has a limited distribution model and relies on its Consultant Network as well as access to idea generation and a guest lecture series to serve the information needs of clients. DeMatteo Monness is capable of covering all sectors as well as most regions across the globe.
DeMatteo Monness received positive reviews in most user feedback categories, making it one of the top Global Generalist performers. The firm received its strongest rating in Customer Support and in clients’ evaluation of Compliance; in both categories, it placed 2nd overall and 1st among Global Generalists. Otherwise, DeMatteo received solid ratings across the board, ranking it 3rd for Cost Effectiveness (2nd among Global Generalist), and 4th for Depth of Coverage and Speed of Matching.
Customer support seems to be DeMatteo’s strongest point: customers commented that the firm has built high quality customer relationships, and its limited distribution business model creates a scarcity value for its experts. Some customers also noted that DeMatteo Monness has a strong database, and a relatively high match quality / hit rate for providing appropriate experts for client needs.
Some customers noted that DeMatteo’s compliance systems could be ugpraded to match up to competitors. It should be noted that in recent months DeMatteo has invested in several compliance technology initiatives including a training module and client usage filters; in addition, DeMatteo takes a relatively conservative approach to expert recruitment, excluding public company employees from its network.
Other Global Generalists to Consider (in alphabetical order):
Guidepoint Global received the second highest number of evaluations in our 2009 study of expert networks. In prior years we considered Guidepoint a healthcare specialist network. However, following the firm’s May 2009 acquisition of Vista Research (which had its greatest strength in technology and energy), the firm has become a bona fide global player with strong coverage across most major sectors.
Guidepoint placed 2nd overall and 1st among Global Generalists for the uniqueness of its experts. Guidepoint also received credit for its impressive healthcare survey capabilities. Clients were very positive about Guidepoint’s coverage of healthcare and consumer goods. Guidepoint’s relationship managers were highly rated by clients, and several clients spoke positively about
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the prospects for the company after the merger with Vista Research. Overall, Guidepoint’s client service, response times, flexibility, and large expert database received very positive feedback. Guidepoint also offers strong compliance capabilities.
Guidepoint received a low rating for cost effectiveness, and because this was an important criteria to the customers surveyed, this effectively took Guidepoint out of contention for Top Pick status.
Some clients expressed dissatisfaction with the lack of self-serve features on Guidepoint’s web portal.
Primary Insight is an expert network service with over 30,000 industry experts. Primary Insight was originally developed within the Bear Stearns Companies, and completed a management buyout from J.P. Morgan in 2009, which retains a minority strategic interest in the firm and a seat on the Board. Also in 2009, the firm opened offices in London and Shanghai to expand its global offerings.
The firm has recently opened new offices in Shanghai and London, in order to better service its existing global client base, 25% of which are based in the UK. Plans are also underway to extend office capabilities to India and South America. Some clients commented positively about Primary Insight’s custom recruiting capabilities, noting that recruitment may sometimes take longer but that the results are usually worthwhile.
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TOP PICKS – HEALTHCARE SPECIALISTS
This section highlights our top pick among those expert networks which provide access primarily to health care experts. Firms which provide access to health care experts as part of a service offering encompassing many other sectors were not considered for this category of Top Picks.
Top Pick: MEDACorp
MEDACorp, a subsidiary of Leerink Swann, recorded extremely high ratings across the board. On an overall basis, MEDACorp placed first for uniqueness of experts, depth of coverage, customer support, speed of matching, survey capabilities, and other services, and also placed 3rd for cost effectiveness.
While other firms that started as healthcare networks have since become generalist providers, MEDACorp retains a razor-sharp focus on the single sector where it is widely perceived to be the strongest provider. MEDACorp’s association with a leading healthcare investment bank gives it a great deal of prestige among experts, and allows it to hold events, meetings, and conferences that are well attended and highly valued by clients.
MEDACorp’s two major areas of weakness were match quality, where it ranked 5th out of 10 firms, and compliance. MEDACorp’s poor showing on Integrity’s compliance index is primarily a result of the firm’s unwillingness to participate in our interview and data collection process.
Customers were practically unanimous in praising MEDACorp’s strength in healthcare, with only a few expressing dissatisfaction that it did not cover more sectors.
Other Firms to Consider (in alphabetical order):
The following healthcare specialists received very positive feedback from clients regarding their services, but did not receive a sufficient number of client feedback votes to be considered for a Top Pick.
Epocrates is most well-known for its PDA/Smartphone medical reference software, which provides physicians with handheld access to an extensive library of drug and disease information. The Epocrates software is used by close to 2 million healthcare providers including over 800,000 physicians at the point of care. This vast installed user base has proven to be an effective market research platform, enabling Epocrates to produce proprietary datasets and statistically significant, predictive surveys of physicians within a short turnaround time. More recently, Epocrates has begun to market itself as an expert network through a service called EPOCRATES MEDINSIGHT®, selling direct consultative access to doctors and other healthcare professionals. The firm also markets data on trends collected from doctor's usage patterns to financial institutions.
Epocrates MEDINSIGHT customers state that the service is a solid tool for quick, simple surveys. The company’s survey capabilities seems to offer good value for the price compared to a number of its competitors. Due to the large userbase of doctors who use Epocrates’ software,
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Epocrates is able to produce more impressive sample sizes in its surveys than comparable healthcare research firms, and surveys with large samples can be completed quite quickly through Epocrates.
Epocrates clients also commented very favorably about Epocrates’ unmatched reach and depth when it comes to finding appropriate physicians for research consultations.
It remains to be seen whether Epocrates’ vast network and software user base enable it to compete effectively in the expert network business, which is currently highly personalized and relationship-based.
Health Care Research & Consulting (HCRC) has an extensive network of relationships with leading physicians, academics, and experts in the healthcare industry. The firm has a comprehensive screening and vetting process and performs well on compliance. In addition to direct expert access, the firm provides channel checks on clinical practices, pipeline monitoring for clinical developments, conference calls and special events with experts, custom reports, and analytical pieces produced by its analysts (who are also responsible for managing and coordinating client contacts with experts).
Sermo, a relatively recent entrant to the expert network space, signed a distribution agreement with Bloomberg LP in October, 2008, enabling Bloomberg clients to poll Sermo physicians through the Bloomberg interface. We have heard rumors that Sermo has recently decided to stop marketing its expert network capabilities to the buy-side, though it continues to support clients through Bloomberg.
Sermo’s strongest performance was in uniqueness of experts and in cost effectiveness. Sermo appeals to its experts as a discussion forum, social network, and community for medical professionals. These features, which have value beyond any consulting revenue earned by experts through the platform, may enable Sermo to build a long-lasting and highly engaged community of experts. If experts have an intrinsic reason to stay and participate on Sermo’s website, they are less likely to participate in other networks, thereby enhancing the scarcity value and uniqueness of the network.
Sermo’s greatest weaknesses were in compliance, match quality, and survey capabilities. Sermo’s poor showing on Integrity’s compliance measure is due, in part, to the firm’s unwillingness to participate in our interview and data collection process.
In addition, several generalist expert networks, such as Gerson Lehrman Group and Guidepoint Global, maintain strong coverage of the healthcare vertical.
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TOP PICKS – TECHNOLOGY SPECIALIST
Although a number of expert network firms started their businesses by focusing primarily on the technology sector, most have since expanded to cover other areas. This section highlights Integrity’s pick for the top expert network firm that specializes in technology.
Top Pick: Primary Global Research
Primary Global Research received Integrity's Top Pick as a technology specialist in our 2009 ResearchFocus report on Expert Networks. Clients commented favorably on PGR’s strong coverage of technology and healthcare. While Primary Global Research also covers several other sectors, most clients we spoke to view Primary Global as being strongest in the technology sector. Unlike many expert networks, Primary Global has a ‘push’ research model that delivers written notes and updates, based on expert input, to clients.
Primary Global received solid scores across various metrics, ranking 4th for Customer Support and for Other Services. Unlike most expert networks, Primary Global has a ‘push’ research model that delivers written notes and updates, based on expert input, to clients. This seemed to be popular with clients, as it allows them to gain additional value from Primary Global’s network even when they are not engaging in direct consultations. Decent performance on all metrics garnered the top pick for Primary Global in the technology specialist category.
The firm has also developed a considerable number of experts in Asia which should stand the firm in good stead as clients look for unique investment ideas in Asia and the Pacific Rim.
Based on the client feedback we received, Primary Global did not rank well in terms of network depth or uniqueness of experts.
Other Technology Specialists to Consider (in alphabetical order):
The Techdirt Insight Community is an eclectic mix of expert network, online discussion group consolidator and business service provider. Techdirt’s insight community is made up primarily of industry professionals, consultants, and analysts, who can help clients to evaluate various kinds of business questions (“cases”) relating to Techdirt’s core areas of strength: tech, telecom, and media.
Participants in the Insight Community are compensated in exchange for providing analysis and discussion of client questions. This model is differentiated from a standard expert network: As opposed to most expert networks which specialize in one-on-one consulting, the Techdirt community aims to provide a more open, conversational form of expert access: Participants in the community may comment on other’s analyses, giving clients the benefit of the entire community’s insight as opposed to the potentially idiosyncratic views of a single expert.
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Tribeca Insights is a recent entrant that aims to be a global, multi-sector expert network with no particular focus on technology. However, clients we spoke to indicated that technology is the sector where they had found Tribeca Insights to be most helpful to their research needs so far. The firm has a custom recruitment model that enables it to find relatively undiscovered experts in a variety of different sectors and industries. Clients indicated that Tribeca Insights also offers competitive pricing and decent cost effectiveness.
As noted in the Generalist Global provider section, Gerson Lehrman Group and Guidepoint Global (through its acquisition of Vista Research) have strong technology sector offerings.
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TOP PICKS – EUROPEAN SPECIALISTS
This section highlights our top picks among those expert networks which are based in Europe and provide access primarily to European experts. Other expert networks, which provide European coverage but are not focused on Europe, were not considered for this Top Picks category:
Top Pick: CognoLink
CognoLink, our top pick for expert networks that are European specialists, received good ratings from customers for their match quality, placing 4th overall on this metric. CognoLink is also the leading European expert network from a compliance standpoint. CognoLink appears to be the best overall choice for investors focused on sourcing European experts.
CognoLink aims to help private equity firms, hedge funds and strategy consulting firms develop insights and understand critical issues associated with their investment decisions in European markets. The firm utilizes its proprietary network of experts, as well as conducting additional project-specific searches and custom recruiting experts as necessary.
Clients commented favorably about CognoLink’s ability to find experienced, senior professionals who were highly knowledgeable about their industry. Several clients commented that CognoLink provided the best coverage of Europe.
CognoLink received a poor score from customers for cost effectiveness, ranking 9th out of 10 firms in this category.
Runner Up: Epito
Epito garnered excellent scores across a range of ratings criteria, placing #1 overall on match quality and cost effectiveness – the two most important metrics for expert network users. Epito’s customers are generally highly satisfied with the service and compare it favorably to other major competitors. Customers commented on Epito’s “full coverage” of the Nordic countries and highly professional and attentive approach to working with customers.
One of Epito’s weaknesses was its relatively weak showing on our compliance index, reflecting the firm’s small size and limited ability to allocate resources to this issue. In addition, Epito’s focus on Northern Europe (Scandinavia) significantly restricts its appeal to investors who may be focused on Europe but not exclusively on Scandinavia. Finally, a few customers noted that Epito should offer a more flexible/innovative pricing structure.
Other European Specialists to Consider (in alphabetical order):
AlphaSights is a relatively new entrant into the expert network space that focuses on delivering high quality, customized experts for clients investing in Europe. AlphaSights has a particular
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specialty in sourcing experts in Germany, Austria and other German-speaking sections of Europe. AlphaSights provides ad hoc expert calls, market tracking, in-depth advisory work, and custom surveys.
Nemo Services Limited, a subsidiary of Noble Group, is a network of experts focused on the UK and India. In the UK the firm focuses on climate change, healthcare, financial services, insurance, leisure, media, support services and the technology sectors. Nemo will support client requests outside of its primary sectors. Nemo emerged from Noble's in-house expert sourcing capability and follows its fundamental approach to equity research.
ExpertView is a London-based firm that provides investors with experts in tech, telecom, media, and related industries. ExpertView's core network is dominated by media professionals, including a large number of journalists, who can provide connections to important players in a given region or industry. In addition to standard one-on-one consultations, ExpertView provides clients with the ability to conduct custom surveys of its network, custom research reports, and conference attendance services.
TGR Research was acquired by Gerson Lehrman Group in September 2009. TGR offered strong coverage of France and French-speaking areas of Europe, including Benelux and Switzerland.
In addition to GLG, several other global generalist expert networks, such as Coleman Research Group, Primary Insight, Guidepoint Global, and DeMatteo Monnes maintain offices and research capabilities in Europe.
LEADING EXPERT NETWORK FIRMS – ASIA-PACIFIC & EMERGING MARKETS
Integrity’s survey revealed that expert network usage in Asia remains extremely low, in proportion to the overall size of the institutional investment community. Although we were not able to gain statistically meaningful data on the usage of expert networks in Asia, our research nonetheless uncovered a series of interesting firms with expert network capabilities that are based in or primarily focused on the Asia-Pacific region.
Capvision Partners specializes in providing business expertise and connections to clients that are looking for experts in China. The firm cites a network of over 30,000 industry veterans, association specialists, academics, and policy makers. The firm covers all major industry verticals in China. Capvision's services includes: one-on-one expert consultations, either by phone or in person; project consultation - for those clients who need access to a specific expert for an extended period of time or by the whole duration of the project; market intelligence - designed for more in-depth research that typically requires a wider coverage of expert types and consultation volume; executive exchange - a forum for clients to exchange knowledge and ideas with China's business, government and investment leaders; and seminars where experts present their views and insights on Chinese business in a lecture and Q&A format.
Engage Experts is a relatively new Indian expert network that provides access to government, regulatory, policy, and business experts within India. The sectors covered by Engage Experts include financial services, telecom, IT, pharmaceuticals, and energy.
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SinoTouch provides institutional investors with access to Chinese industry experts, including past and present executives, sales and management staff, government officials and policy makers, and other industry participants. SinoTouch provides investors with an extensive range of services, from channel checks and one-on-one consultations to fully-managed custom research projects and proprietary analysis.
Riedel Global Experts is focused exclusively on the global emerging markets, which includes a number of countries in Asia (China, India, Indonesia, Malaysia, Thailand) as well as Latin America and emerging European countries. Riedel’s primary advantage is its local presence in a large number of emerging markets. Riedel employs 30 analysts in 15 countries to provide local insights into emerging market companies through Riedel Research Group. These analysts provide access and manage contacts with experts within their market. In addition, the firm has several regional partners who identify industry experts for client consultations in specific areas.
Ergo is a research and consulting firm that is grounded in the use of primary experts. Ergo’s multi-lingual research managers and country teams work with clients on custom research projects, and mediate access to primary experts necessary for the engagement. In 2006, Ergo spun out of Gerson Lehrman Group. While at GLG, the team focused on in-depth engagements and global macro studies. Ergo’s management and research teams are drawn from leading strategy consulting firms, expert networks, media, and government/intelligence/military backgrounds. The firm has offices with research teams in New York, Washington DC, and Baghdad, Iraq. Ergo’s experts are largely custom recruited as part of in-depth consulting projects. Ergo’s greatest strength is its emerging and frontier markets focus, particularly strong in China, the Middle East, North Africa, and Brazil.
Frontier Strategy Group (FSG) is an expert network that primarily advises large corporations on market-entry strategies, mergers and acquisitions, operational issues, and government relations in emerging markets. FSG is headquartered in Washington, DC, and has offices in Los Angeles, New York, Hong Kong, Sao Paulo and Zurich. FSG's Expert Advisory Network is an extensive group of former senior executives, diplomats, and scholars that supports multinational companies in growing their businesses across emerging markets. Network members participate in events and webcasts and are available to FSG clients for one-to-one consultations. Network members have experience across all major global industries.
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SECTION VI – COMPANY PROFILES
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Abrams Research TEL: 347 882 8227
YEAR FOUNDED: 2008 www.abramsresearch.com
GEOGRAPHIC COVERAGE: North America; Europe; Asia Pacific
SECTOR/INDUSTRY COVERAGE: Media
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Corporate
SERVICES OFFERED: Consulting
DESCRIPTION
Abrams Research is an expert network that connects business leaders with a global community of media professionals. Businesses can communicate directly with media insiders in almost any region or area of expertise. CEO Dan Abrams is an attorney and was the Chief Legal Analyst for NBC News and MSNBC. He launched Abrams Research in November 2008 and is now an outside consultant to NBC. The Abrams Research Network (ARN) includes current and former media professionals, influential critics and reviewers, investigative journalists, authors and corporate communications professionals.
Abrams Research offers services for media strategy, online media advice, crisis communications, brand strategy, litigation communications, media training and media research. Their methodology includes media panels, surveys & reports, and one-on-one consulting. Top media professionals are compensated for working with businesses in any of the following ways: communicating or meeting directly with clients; answering surveys and questionnaires regarding media strategy; taking part in "mock juries" of media insiders to offer insight or guidance; offering on-air media training; and investigative reporting and research for businesses.
STRENGTHS
Through its founder, Dan Abrams, Abrams Research has strong connections within the global media industry.
WEAKNESSES
Predominantly works with corporate clients. No demonstrated strength in serving financial services or investment research clients.
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AlphaSights Russell Chambers, The Piazza Covent Garden London, WC2E 8AA YEAR FOUNDED: 2008 United Kingdom www.alphasights.com TEL: 44 20 7420 2888 FAX: 44 20 7420 2882
GEOGRAPHIC COVERAGE: Europe
SECTOR COVERAGE: All Sectors
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Institutional; Hedge Funds; Private Equity Firms; Consulting Firms
SERVICES OFFERED: Channel Checks; Access To Industry Experts; Custom Surveys
DESCRIPTION
AlphaSights is an information services and advisory firm that serves institutional buy-side investors operating and investing across all European markets. The firm's employees possess backgrounds in multiple nationalities and professions such as Principal Investing, Operational Management, Strategy Consulting, Executive Search and Market Research. AlphaSights is able to provide clients with bespoke services depending on the client's needs.
The firm's advisors pass their knowledge to clients' mainly through ad hoc telephone consultations. Other ways for advisors to communicate with the clients could be through participating in a survey and in-person consultations. AlphaSights has good coverage of Germany, Austria and German-speaking Switzerland.
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Business Connect China Inc. Room 11F ABC, Crystal Century Tower, No. 567 (BCC) Weihai Road, Jingan District Shanghai, China
[email protected] www.businessconnectchina.com
GEOGRAPHIC COVERAGE: Asia Pacific (China)
SECTOR COVERAGE: Consumer Discretionary; Consumer Staples; Energy; Financials; Health Care; Industrials; Materials
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Institutional; Corporate
SERVICES OFFERED: Access to Industry Experts; Custom Surveys; Written Research Reports
DESCRIPTION
Business Connect China Inc. (BCC) is an expert network made up of managers, civil servants, scientists, engineers, attorneys, and entrepreneurs from around China. This collection of experts provides consultation, market intelligence, advisory services, investment, and events for the China market. BCC helps global financial services firms, professional service firms, corporations, and academic and nonprofit institutions make decisions on investment and business strategies in China. The firm has a technology and research platform to support its expert network, custom research and structured product offerings. Further, the firm's searchable database of experts was developed using taxonomies and profiling tools to accurately classify each expert's experience and expertise. The firm operates in four locations: San Francisco, Hong Kong, Shanghai and Beijing, and is able to provide translation services, global teleconferencing capability and discreteness in setting up client-expert interactions when needed.
BCC provides clients with one-on-one consultations, customized surveys and reports, customized consulting engagements, Industry news services, due diligence and advisory work and in-house professional investment and venture capital arm. In addition, BCC performs custom research allowing clients to dictate research topics. The firm then pairs clients with analysts and experts for deeper consulting and analysis. The firm covers the following industry sectors: financial services, consumer goods and trading, healthcare, media, real estate and construction, education and professional services, transportation and logistics, and energy.
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Capvision Partners 2202 Junling Plaza, 500 North Chengdu Road Huangpu District YEAR FOUNDED: 2006 Shanghai, 20003 www.Capvision.com.cn China TEL: 86 21 6375 8181 GEOGRAPHIC COVERAGE: Asia Pacific (China) SECTOR COVERAGE: All Sectors BUSINESS MODEL: Independent PRIMARY CLIENTS: Institutional; Corporate; Sell Side; Long Only; Hedge Funds; Private Equity Firms SERVICES OFFERED: Access to Company Management; In-person Meetings and/or Conferences; Investor Tours; Channel Checks; Custom Surveys; Access To Industry Experts DESCRIPTION Capvision Partners is an expert network that specializes in providing business expertise and connections to firms that are looking for expertise in China. Through its network of over 30,000 industry veterans, association specialists, academics, and regulatory/policy experts, Capvision provides clients with insights on industry developments, trends and issues so they can make informed investment and business decisions. The firm focuses across all major industry verticals in China including agriculture, healthcare & pharmaceuticals, retail & distribution, food & beverage, telecom & utilities, technology, real estate & construction, chemicals, automotives, transportation & logistics, regulatory & government, financial services, textiles & fabrics, fast moving consumer goods (FMCG), energy, media & entertainment, education, industrial goods, metals & mining, aerospace and legal.
Capvision services includes: Consultation Services - based on the client's needs and research objectives, Capvision will arrange one-on-one consultations between the client and the experts, either by phone or in person; Project Consultation - for those clients who need access to a specific expert for an extended period of time or by the whole duration of the project; Market Intelligence - designed for more in-depth research that typically requires a wider coverage of expert types and consultation volume; Executive Exchange - a forum for clients to exchange knowledge and ideas with China's business, government and investment leaders; and Seminars - experts present their views and insights on Chinese business in a lecture and Q&A format.
STRENGTHS Capvision provides extensive coverage of Chinese industry and regulatory issues. Strong in Fast Moving Consumer Goods (FMCG), Energy, Healthcare, Agriculture, Regulatory, Automotive, and Real Estate
WEAKNESSES No negative feedback received by Integrity Research.
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CognoLink Ltd. 23 Howland Street London, W1T 4AY YEAR FOUNDED: 2007 United Kingdom www.cognolink.com TEL: 44 207 268 6600 FAX: 44 203 012 0209
GEOGRAPHIC COVERAGE: Europe
SECTOR COVERAGE: Consumer Discretionary; Industrials; Information Technology; Materials; Utilities; Healthcare; Media; Telecommunications
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Hedge Funds; Private Equity Firms; Corporate; Institutional
SERVICES OFFERED: Access to Industry Experts; Access to Management; Channel Checks; Custom Surveys; Meetings and/or Conferences
DESCRIPTION
CognoLink Ltd. is an expert network focused on facilitating consultations with industry specialists in Europe. CognoLink aims to help private equity firms, hedge funds and strategy consulting firms develop insights and understand critical issues associated with their investment decisions in European markets. The firm utilizes its proprietary network of experts, as well as conducting additional project-specific searches and custom recruiting experts as necessary.
CognoLink sets up an initial assessment with the client to understand the project context, timing and issues before it moves into the specialist search and matching phase. Prospective specialists are interviewed and evaluated before one-on-one phone calls are held with the specialists of choice. Follow-up research or additional consultations may be arranged per clients' request.
STRENGTHS
CognoLink, our top pick for expert networks that are European specialists, received good ratings from customers for their match quality, placing 4th overall on this metric. CognoLink is also the leading European expert network from a compliance standpoint. CognoLink appears to be the best overall choice for investors focused on sourcing European experts.
Clients commented favorably about CognoLink’s ability to find experienced, senior professionals who were highly knowledgeable about their industry. Several clients commented that CognoLink provided the best coverage of Europe.
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WEAKNESSES
CognoLink received a poor score from customers for cost effectiveness, ranking 9th out of 10 firms in this category.
CognoLink Ratings Summary
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Coleman Research Group, Inc. 280 Park Avenue, 12th Floor East New York, NY 10017 YEAR FOUNDED: 2003 United States www.colemanrg.com TEL: 212 223 0185
GEOGRAPHIC COVERAGE: Global
SECTOR COVERAGE: All Sectors
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Institutional; Long Only; Hedge Funds; Private Equity Firms
SERVICES OFFERED: Industry/Sector Analysis; Meetings and/or Conferences; Channel Checks; Custom Research; Consulting; Access To Industry Experts
DESCRIPTION
Coleman Research Group (CRG) is an expert network that serves the institutional investor community by connecting portfolio managers, buy-side analysts and hedge fund managers with relevant industry specialists for telephone consultations. Coleman Research Group Executive Forum Members are industry professionals, senior managers, experts, operational and product managers, and scientists across all industries. Coleman has global research coverage, with offices in Beijing, London, and a recently opened office in Hong Kong. Staff of Coleman Research speak at least 15 languages. Coleman received a very significant number of votes in our most recent survey on expert network usage, a sign of its increased market share in recent years. We estimate that it is currently among the 4 largest expert network firms in the world. CRG's clients are predominantly asset managers and private equity, with few corporate clients. Unlike some of its competitors, CRG does not offer its services to equity analysts at investment banks.
CRG's Executive Forum, a community of industry professionals, provides consulting services on an hourly basis to institutional investors. CRG's proprietary Knowledge Broker application, along with expert matching services, equips institutional investors with tools to manage their research processes, industry contacts, and projects. CRG has a particularly strong retail team tasked to identify the best experts in the space worldwide.
STRENGTHS
As our 2009 Top Pick for the category of Global Generalist Expert Networks, Coleman Research scored well on the factors that expert network users rated most highly. Coleman Research received very strong scores for Match Quality, ranking 2nd out of 10, and customers comment that Coleman is highly adept at finding the right expert who may not be on other firms’ networks. Customers also ranked Coleman in 2nd place (out of 10 firms) for Cost Effectiveness
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and Speed of Matching; Coleman placed 3rd for Uniqueness of Experts and Depth of Coverage. Out of all the global generalist firms for whom we received feedback, Coleman placed first in Match Quality, Cost Effectiveness, and Speed of Matching. Coleman Research also ranked second best for overall compliance capabilities out of all expert networks analyzed in this report.
Customers comment that Coleman has been working to expand its global coverage, although the strongest network of responders remains in North America. Clients were particularly positive about the customer support they received, noting the professionalism and friendliness of Coleman staff and the relationships they build with clients.
WEAKNESSES
Negative client comments, although coming from a minority of clients surveyed, included complaints about the inflexibility of payment terms and the need to develop additional compliance tools that would enable them to easily implement and manage client compliance requirements.
Coleman Research Ratings Summary
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DeMatteo Monness LLC 780 Third Avenue, 45th Floor New York, NY 10017 YEAR FOUNDED: 1997 United States www.dmllc.com TEL: 212 833 9900 FAX: 212 593 8812
GEOGRAPHIC COVERAGE: Global
SECTOR COVERAGE: Consumer Discretionary; Consumer Staples; Energy; Financials; Health Care; Industrials; Information Technology; Materials; Telecommunication Services; Utilities
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Institutional; Long Only; Hedge Funds; Private Equity Firms
SERVICES OFFERED: Access to Company Management; Access to Industry Experts; Guest Speaker Series; Idea Forums; Brokerage/Trading
DESCRIPTION
Founded in 1997 by Joe DeMatteo and Bill Monness, DeMatteo Monness LLC is an expert network research shop which is organized into trading, research and sales departments and has offices in North America, Asia and Europe. The firm has a limited distribution model and relies on its Consultant Network as well as access to idea generation and a guest lecture series to serve the information needs of clients. DeMatteo Monness is capable of covering all sectors as well as most regions across the globe.
DeMatteo Monness offers its clients access to a network of industry experts. A high volume of consultants and industry experts are connected to clients daily and special events are scheduled regularly. Idea forums are hosted across the U.S. and Europe. The customers can access the experts directly or DeMatteo Monness can conduct custom primary research projects on behalf of their clients. The industry experts span North America, Europe, and Asia (outside North America the firm has offices in London and Shanghai). The company also hosts numerous Idea Forums for its clients and sponsors a Guest Speaker series with public and private company executives, industry experts, academics and entrepreneurs who provide views and insight not widely disseminated through other channels. DeMatteo’s recent deal with LinkedIn, which provides the firm with exclusive access to LinkedIn’s global membership for expert recruitment purposes, should further enhance both the breadth and depth of its coverage.
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STRENGTHS
DeMatteo Monness received positive reviews in most user feedback categories, making it one of the top Global Generalist performers. The firm received its strongest rating in Customer Support and in clients’ evaluation of Compliance; in both categories, it placed 2nd overall and 1st among Global Generalists. Otherwise, DeMatteo received solid ratings across the board, ranking it 3rd for Cost Effectiveness (2nd among Global Generalist), and 4th for Depth of Coverage and Speed of Matching.
Customer support seems to be DeMatteo’s strongest point: customers commented that the firm has built high quality customer relationships, and its limited distribution business model creates a scarcity value for its experts. Some customers also noted that DeMatteo Monness has a strong database, and a relatively high match quality / hit rate for providing appropriate experts for client needs.
WEAKNESSES
Some customers noted that DeMatteo’s compliance systems could be ugpraded to match up to competitors. It should be noted that in recent months DeMatteo has invested in several compliance technology initiatives including a training module and client usage filters; in addition, DeMatteo takes a relatively conservative approach to expert recruitment, excluding public company employees from its network.
DeMatteo Monness Ratings Summary
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Engage Experts LLC 4455 Brookfield Corporate Drive Chantilly, VA 20151 YEAR FOUNDED: 2009 United States www.engageexperts.com TEL: 202 347 4261 FAX: 202 347 4649
GEOGRAPHIC COVERAGE: Asia Pacific (India)
SECTOR COVERAGE: Energy; Financials; Information Technology; Telecommunication Services; Government and Regulatory
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Corporate; Institutional
SERVICES OFFERED: Access to Industry Experts; Custom Surveys
DESCRIPTION
Engage Experts LLC is an expert network that specializes in providing business expertise and connections to firms that are looking for expertise in India and for firms in India that are looking for expertise overseas in North America and Europe. Headquartered in Washington, D.C. and having their Indian hub in Pune, India, Engage Experts has a database of experts that consists of professionals who are sourced from the public and private sectors. Their public sector experts are alumni of various government ministries and public sector entities. They offer insight and information on policy and regulatory issues as well as "ethical access and advocacy" services vis- a-vis the government. Their private sector experts are alumni or employees of leading Indian and global firms, providing both strategic and tactical advice and information to businesses seeking to enter or expand in India. Clients include corporations, small & medium businesses, professional services firms and the investment community.
Engage Experts charges clients an annual subscription fee for access to their expert network, recruitment, and matching services.
DESCRIPTION
Predominantly focused on India, with extensive contacts in industry and government.
DESCRIPTION
Limited experience working with financial clients.
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Epito AB Ankdammsgatan 35, 3tr Solna, 17167 YEAR FOUNDED: 2007 Sweden www.epito.se TEL: 46 8 505 654 20 FAX: 46 8 505 654 21
GEOGRAPHIC COVERAGE: Northern Europe (Scandinavia)
SECTOR COVERAGE: All Sectors
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Private Equity Firms; Management Consultancies; Institutional
SERVICES OFFERED: Access to Industry Experts; Access to Company Management; Meetings and/or Conferences; Custom Surveys; Written Research Reports
DESCRIPTION
Epito oversees an expert network community, focused on the Nordic region, which offers clients research solutions that vary from a quick consultation to extensive research projects. Clients include the following: small and large corporations, different kinds of consultancies, private equity and venture capital funds, pension funds and other asset managers, investment banks and law firms as well as companies and institutes in the public sector. The firm's experts cover all fields and industries in Denmark, Finland, Norway and Sweden.
Epito tailors the research solution per project using telephone interviews, meetings and/or surveys and reports taking into account various factors such as project timeline, previous knowledge or general preferences. Every consultation between expert and the client is supervised to ensure that all parties comply with legal and ethical standards.
STRENGTHS
Epito garnered excellent scores across a range of ratings criteria, placing #1 overall on match quality and cost effectiveness – the two most important metrics for expert network users. Epito’s customers are generally highly satisfied with the service and compare it favorably to other major competitors. Customers commented on Epito’s “full coverage” of the Nordic countries and highly professional and attentive approach to working with customers.
WEAKNESSES
One of Epito’s weaknesses was its relatively weak showing on our compliance index, reflecting the firm’s small size and limited ability to allocate resources to this issue. In addition, Epito’s focus on Northern Europe (Scandinavia) significantly restricts its appeal to investors who may be
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focused on Europe but not exclusively on Scandinavia. Finally, a few customers noted that Epito should offer a more flexible/innovative pricing structure.
Epito Ratings Summary
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Epocrates, Inc. 1100 Park Place, Suite 300 San Mateo, California 94403 United States YEAR FOUNDED: 1998 TEL: 650 227 1700 www.epocrates.com FAX: 650 227 2770
GEOGRAPHIC COVERAGE: North America SECTOR COVERAGE: Health Care BUSINESS MODEL: Independent PRIMARY CLIENTS: Institutional; Corporate SERVICES OFFERED: Access to Healthcare Experts; Channel Checks; Custom Surveys; Meetings and/or Conferences; Written Research Reports, Proprietary Datasets
DESCRIPTION
Epocrates is most well-known for its PDA/Smartphone medical reference software, which provides physicians with handheld access to an extensive library of drug and disease information. The Epocrates software is used by close to 2 million healthcare providers including over 800,000 physicians at the point of care. This vast installed user base has proven to be an effective market research platform, enabling Epocrates to produce proprietary datasets and statistically significant, predictive surveys of physicians within a short turnaround time. More recently, Epocrates has begun to market itself as an expert network through a service called EPOCRATES MEDINSIGHT®, selling direct consultative access to doctors and other healthcare professionals. The firm also markets data on trends collected from doctor's usage patterns to financial institutions.
Epocrates MEDINSIGHT offers a number of services in addition to the information it provides directly to doctors. The first such service is a type of quick survey described as a Q&A. This particular project allows users to post questions online and allows anywhere from 25 to 100 MDs or HCPs to answer user questions within hours; responses can be viewed in real time as they come in. If there is a response from the Q&A survey that requires further understanding, a call can be set up between the user and the MD or HCP that answered the questions. Epocrates also offers phone and in person consultation meetings on an as-needed basis and at medical conferences. These consultations can be facilitated with screening questions. Epocrates also offers a more robust survey capability. Surveys of this nature can be turned around fairly quickly (average turnaround time is 1 week) and reach a large sample size. In addition to access to their network, the company offers proprietary data sets taken from doctor usage data. The company offers formulary trends which allow users to see what different healthcare providers are currently covering in their healthcare insurance plans. They also have TapStream Trends which tracks MD's interest in different drugs by monitoring how often information on a certain drug is accessed over their network.
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STRENGTHS
Epocrates MEDINSIGHT customers state that the service is a solid tool for quick, simple surveys. The company’s survey capabilities seems to offer good value for the price compared to a number of its competitors. Due to the large userbase of doctors who use Epocrates’ software, Epocrates is able to produce more impressive sample sizes in its surveys than comparable healthcare research firms, and surveys with large samples can be completed quite quickly through Epocrates.
Epocrates clients also commented very favorably about Epocrates’ unmatched reach and depth when it comes to finding appropriate physicians for research consultations.
WEAKNESSES
It remains to be seen whether Epocrates’ vast network and software user base enable it to compete effectively in the expert network business, which is currently highly personalized and relationship-based.
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Ergo 122 E 55th Street New York, NY 10022 YEAR FOUNDED: 2006 United States www.ergo.net TEL: 212 421 4035
GEOGRAPHIC COVERAGE: Global
SECTOR COVERAGE: All Sectors
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Corporate, Hedge Funds, Institutional, Private Equity
SERVICES OFFERED: Access to Industry Experts, Channel Checks, Custom Surveys, Meetings and Conferences, Written Research Reports (custom studies on: entry strategy, due diligence, strategy mapping, etc.), Focus Groups, Geopolitical Intelligence
DESCRIPTION
Ergo is a research and consulting firm that is grounded in the use of primary experts. Ergo’s multi-lingual research managers and country teams work with clients on custom research projects, and mediate access to primary experts necessary for the engagement. In 2006, Ergo spun out of Gerson Lehrman Group. While at GLG, the team focused on in-depth engagements and global macro studies.
Ergo’s management and research teams are drawn from leading strategy consulting firms, expert networks, media, and government/intelligence/military backgrounds. The firm has offices with research teams in New York, Washington DC, and Baghdad, Iraq. Ergo’s experts are largely custom recruited as part of in-depth consulting projects.
STRENGTHS
Emerging and frontier markets focus, particularly strong in China, the Middle East, North Africa, and Brazil. Hybrid of expert network and strategy consulting models adds value not found in traditional expert engagements. Custom recruitment of experts helps to ensure good fit with client needs. Research team members have diverse backgrounds that may be brought to bear on client projects.
WEAKNESSES
Mediated expert access may be seen as a weakness by clients who are used to directly speaking with experts in an unmoderated fashion.
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Evalueserve Circle of Experts 615 South Dupont Highway Dover, DE 19901 YEAR FOUNDED: 2003 United States www.circleofexperts.com TEL: 212 682 6676 FAX: 212 624 0256
GEOGRAPHIC COVERAGE: Global
SECTOR COVERAGE: All Sectors
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Institutional; Corporate; Consulting Firms; Investment Banks
SERVICES OFFERED: Financial Analytics; Written Research Reports; Custom Surveys; Access to Industry Experts DESCRIPTION Evalueserve Circle of Experts is an expert network providing professional investors with direct one-on-one access to experts through a global network of industry leaders and practitioners. Evalueserve's network includes industry experts from Fortune 500 companies, universities, government, and nonprofit firms. Circle members speak at their discretion in private conversations, surveys, conferences, and events. The firm covers all industry sectors. Evalueserve connects its experts with hedge fund managers, private equity firms, and asset managers.
Evalueserve focuses on serving hedge & mutual funds as a primary component of its clientele. Evalueserve offers access to on-the-ground experts in North America, Europe, Latin America, Asia, India, and the Middle East. Most of this international work is customized for a given client's due diligence requirements. For each client request, Evalueserve drafts a specification of the client's needs, which is then used to screen experts to ensure a good fit with client requirements. Experts are available flexibly for short-term interviews as well as longer consulting projects, and may provide advice to a single client on an exclusive basis.
STRENGTHS Evalueserve’s compliance policies are rated highly; Evalueserve also appears to be a cost effective provider of expert network and custom research solutions. Given Evalueserve's Indian base, the network is particularly strong in India, but has also made efforts to expand its emerging markets coverage.
WEAKNESSES We received no customer responses for Evalueserve in our survey of expert network clients, indicating low market penetration.
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ExpertView High Holborn House, 52-54 High Holborn London WC1V 6RL YEAR FOUNDED: 2007 United Kingdom www.expertview.com TEL: +44 (0)20 3206 0106
GEOGRAPHIC COVERAGE: Europe, Asia-Pacific, Latin America, Africa
SECTOR COVERAGE: Consumer Discretionary (Retail and Consumer Goods); Information Technology; Telecommunications; Media; Energy; Financial Services; Agriculture
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Institutional; Hedge Funds
SERVICES OFFERED: Access to Industry Experts
DESCRIPTION ExpertView is an expert network that provides investment professionals with direct access to experts from industry, academia and the media. The firm uses a custom recruiting model, matching experts to the specific needs of clients. The firm's compliance terms and conditions reflect current US and European legislation. ExpertView is primarily focused on the Media, Entertainment & Technology sectors.
ExpertView provides institutional, private equity and hedge fund managers with direct access to front-line industry experts. ExpertView's network contains around 10,000 experts, focused primarily on the European tech, telecom, media, and gaming industries. Most experts are currently active in the industry, in management positions, or in academia. ExpertView's core network is dominated by media professionals, including a large number of journalists, who can provide connections to important players in a given region or industry. Searches typically take 24-48 hours to conduct. In addition to standard one-on-one consultations, ExpertView provides clients with the ability to conduct custom surveys of its network, custom research reports, and conference attendance services.
STRENGTHS ExpertView is particularly strong in its coverage of the UK, and the media industry particularly. Its access to a large network of journalists provides valuable connections to experts in a range of different sectors and industries. The firm's vetting and matching process is quite strong. ExpertView also has a flexible pricing model.
WEAKNESSES Custom recruiting model limits the scale of the network. Not as strong in sourcing continental European experts as some of its European competitors.
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Frontier Strategy Group (FSG) 1150 18th Street NW, Suite 350 Washington, DC 20036 YEAR FOUNDED: 2004 United States www.frontierstrategygroup.com TEL: 202 741 1333 FAX: 202 741 1334
GEOGRAPHIC COVERAGE: Emerging Markets
SECTOR COVERAGE: All Sectors
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Corporate
SERVICES OFFERED: Custom Market Research; Events and Conferences; Access to Industry Experts
DESCRIPTION
Frontier Strategy Group (FSG) is an expert network that primarily advises large corporations on market-entry strategies, mergers and acquisitions, operational issues, and government relations in emerging markets. FSG is headquartered in Washington, DC, and has offices in Los Angeles, New York, Hong Kong, Sao Paulo and Zurich.
FSG's Expert Advisory Network is an extensive group of former senior executives, diplomats, and scholars that supports multinational companies in growing their businesses across emerging markets. Network members participate in events and webcasts and are available to FSG clients for one-to-one consultations. Network members have experience across all major global industries.
STRENGTHS
Emerging markets focus including strong network in Brazil.
WEAKNESSES
Corporate focus means that the firm is not well suited for serving asset management clients. Limited compliance capabilities.
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Gerson Lehrman Group, Inc. 850 Third Avenue, 9th Floor New York, NY 10022 YEAR FOUNDED: 1998 United States www.glgroup.com TEL: 212 984 8500 FAX: 212 984 8538 GEOGRAPHIC COVERAGE: North America; Europe; Middle East & Africa; Asia Pacific; Latin America; Emerging Markets
SECTOR COVERAGE: Accounting & Financial Analysis; Consumer Goods & Services; Energy & Industrials; Financial & Business Services; Healthcare; Legal, Economic & Regulatory Affairs; Real Estate; Technology, Media & Telecommunications
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Institutional; Corporate; Private Equity Firms; Investment Banks; Professional Service Firms
SERVICES OFFERED: Direct Access to Analysts; Consulting; Industry/Sector Analysis; Meetings and/or Conferences; Channel Checks; Custom Research; Custom Surveys
DESCRIPTION
Gerson Lehrman Group (GLG) is the leading provider of expert network services, facilitating direct communications between institutional investors and a group of over 250,000 domain experts (council members). It is by far the largest company in the expert network space, in terms of revenues, name recognition, the number of existing experts in its network and services offered. Gerson Lehrman received the most responses from the buy-side investors surveyed in our 2009 study of the expert network industry.
Gerson Lehrman offers direct telephonic consultations with experts, surveys or polls of experts, expert blogs, custom research, meetings, conferences, and seminars. The firm has been a market leader in developing its compliance systems, which are second to none. Gerson has been aggressively expanding its business, and now has eleven non-US offices (four in Europe including a new operations hub in Dublin and seven in Asia including an operations hub in New Delhi). In September 2009, GLG acquired TGR Research, a Paris-based boutique network, to deepen its services for continental Europe. It also has eleven non-English versions of its website, for use by non-US clients and experts.
STRENGTHS
The runner-up in the Global Generalist category in our 2009 Expert Networks study (following a Top Pick status in our 2008 study), Gerson Lehrman is the #1 expert network by any commercial measure. The metric where Gerson performs best is compliance, where the firm is rated first, significantly higher than any competing firm. Gerson Lehrman has made substantial investments in building an impressive compliance system, backed up by highly trained compliance staff and rigorous procedures, which has set the market standard for others to emulate.
Gerson garnered an excellent score (2nd overall, first among global generalist firms) for its depth of coverage; which reflects the scope of Gerson’s network. Clients commented favorably on the size and
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breadth of Gerson Lehrman’s network, particularly internationally – in areas like South America and across Asia – and in core competencies like healthcare and technology. Gerson’s client service team was also rated highly. GLG also garnered a 3rd place rank in Speed of Matching, 4th place rank in Customer Support, and 2nd overall for Other Services.
WEAKNESSES
Gerson Lehrman’s overall score was hurt by a low score on match quality, which is the most important metric to users of expert networks. Gerson ranked ninth out of the ten firms that were rated in this category. Clients noted that, on average, slightly less than 60% of the calls set up by GLG turned out to be of high quality. Anecdotally, clients have told us that in the past they experienced higher percentages of successful matches using Gerson's network. It may be that Gerson over the past few years let smaller players out-hustle them. Another possible explanation for the low match quality score is compliance. Gerson's compliance framework excludes certain experts altogether and limit some types of experts on some types of projects, which may affect client ratings of "match quality."
Other client complaints about Gerson Lehrman included several relating to pricing issues – both the absolute level of pricing as well as the flexibility of Gerson's pricing model. Several clients found pricing by vertical or by region “unacceptable” or “problematic”. Other clients complained that GLG’s experts were “watered down”, “generic”, or “commoditized”, and that it was hard to find knowledgeable experts through GLG that competitors had not already spoken to. A few clients complained about issues with customer management and the sales team (although, overall, GLG was rated very highly for customer service), and noted that GLG’s research managers at times appeared not to be very knowledgeable about the subject matter at hand. Since the survey began, Gerson has independently launched initiatives to refine its search algorithms, provide custom recruiting to all its clients and to flag the unused experts within its network.
Gerson Lehrman Ratings Summary
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Greenwood Research 2 Dundee Park Andover, Massachusetts 1810 YEAR FOUNDED: 2004 United States www.greenwoodresearch.com TEL: 978 775 5454
GEOGRAPHIC COVERAGE: North America; Europe; Asia-Pacific
SECTOR COVERAGE: Consumer Staples; Energy; Health Care; Information Technology; Telecommunication Services; Real Estate
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Institutional; Sell Side; Private Equity Firms
SERVICES OFFERED: Access to Industry Experts; Meetings and/or Conferences; Custom Surveys and Expert Analysis
DESCRIPTION
Greenwood Research is a boutique expert network firm focused on delivering actionable primary research to professional asset managers, private equity firms, and investment banks. The firm maintains a network of experts that consists of managers, salespeople, scientists, product specialists, academics, and others. Greenwood Research was started by Floyd Greenwood in 2004.
Greenwood Research is focused on providing proprietary primary research accompanied with a high level of customer service. The firm uses a custom recruiting model. Greenwood makes use of its network of experts in order to provide insight into an industry or firm's entire value chain. Greenwood focuses on companies in the technology, telecommunications, and consumer products and retailing sectors.
STRENGTHS
Greenwood Research received an Honorable Mention as a Tech/Telecom specialist in Integrity's 2008 ResearchFocus report on Expert Networks. Greenwood provides a highly customized level of service, focused on finding exactly the right match for a client's needs. Greenwood's services are offered in a number of flexible pricing plans. Greenwood also has relatively good compliance for a small firm.
WEAKNESSES
Limited scale of network.
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Guidepoint Global 730 Third Avenue, 11th Floor New York, NY 10017 YEAR FOUNDED: 2003 TEL: 212 375 2980 www.guidepointglobal.com FAX: 212 838 9175
GEOGRAPHIC COVERAGE: Global
SECTOR COVERAGE: Healthcare; Energy; Consumer Goods & Services; Technology, Media & Telecom; Financial & Business Services; Industrials; Energy; Legal & Accounting
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Institutional; Hedge Funds; Private Equity
SERVICES OFFERED: Access to Industry Experts; Meetings and/or Conferences; Custom Research; Custom Surveys; Industry/Sector Analysis;
DESCRIPTION
Guidepoint Global received the second highest number of evaluations in our 2009 study of expert networks. In prior years we considered Guidepoint a healthcare specialist network. However, following the firm’s May 2009 acquisition of Vista Research (which had its greatest strength in technology and energy), the firm has become a bona fide global player with strong coverage across most major sectors.
Guidepoint Global connects clients with experts in all sectors and across most regions of the world for private telephone consultations. They also undertake customized surveys and conduct seminars and other events. Guidepoint offers a subscription-based service for all types of institutional investors and some life science companies. Guidepoint has a large standing network of experts and also regularly conducts custom recruitment to find experts for specific projects. The Guidepoint Tracker is a cross-sectional survey-based research product that collects and monitors trends and market share in select medical technology and therapeutic industries. Guidepoint offers robust custom survey capabilities.
STRENGTHS
Guidepoint placed 2nd overall and 1st among Global Generalists for the uniqueness of its experts. Guidepoint also received credit for its impressive healthcare survey capabilities. Clients were very positive about Guidepoint’s coverage of healthcare and consumer goods. Guidepoint’s relationship managers were highly rated by clients, and several clients spoke positively about the prospects for the company after the merger with Vista Research. Overall, Guidepoint’s client service, response times, flexibility, and large expert database received very positive feedback. Guidepoint also offers strong compliance capabilities.
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WEAKNESSES
Guidepoint received a low rating for cost effectiveness, and because this was an important criteria to the customers surveyed, this effectively took Guidepoint out of contention for Top Pick status.
Some clients expressed dissatisfaction with the lack of self-serve features on Guidepoint’s web portal.
Guidepoint Global Ratings Summary
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HCRC (Health Care Research & 29 Broadway, 26th Floor Consulting) New York, NY 10006 United States
YEAR FOUNDED: 1981 TEL: 646.867.0528 www.hcrccorp.com FAX: 917.591.9175 GEOGRAPHIC COVERAGE: North America SECTOR COVERAGE: Health Care BUSINESS MODEL: Independent PRIMARY CLIENTS: Institutional; Hedge Funds SERVICES OFFERED: Access to Industry Experts; Channel Checks; Proprietary Databases; Events and Conferences; Custom Research; Written Research Reports DESCRIPTION HCRC (Healthcare Research & Consulting) was founded in 2003 in an effort to bring value to healthcare companies and their investors through proprietary research offerings. The firm's management team includes industry professionals with extensive and relevant experience in healthcare, consulting and investment management. The firm provides clients with access to internationally known experts in the healthcare industry. In 2004, HCRC established an International Medical Advisory Board, including leading experts in all major therapeutic areas, which provides insight into clinical product pipelines, clinical practice behavior and applicability of current and novel therapies. In 2005, HCRC strengthened our developed an Industry Advisory Committee that affords strategic insight into issues related to the market assessment, marketability and potential of newly introduced products. HCRC's signature products, Clinical Practice Monitor (CPM) and Pipeline Monitor (PM), were developed and designed to help clients keep pace with developments in the healthcare market.
Products and Services offered by HCRC include: Clinical Practice Monitor – a channel check product that assesses physician practice behavior with regard to newly launched products and other available therapies; Pipeline Monitor - tracks the status of clinical development, by individual company, and includes all therapeutic areas; Special Events and Conference Calls; Custom Research; Special Reports. HCRC is marketed to asset managers through Wall Street Access.
STRENGTHS Healthcare focus; extensive network of doctors.
WEAKNESSES No customer feedback received.
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Intota 2051 Killebrew Drive Minneapolis, MN 55425 YEAR FOUNDED: 1984 United States www.intota.com TEL: 1-800-833-8055 FAX: 952 851 7770
GEOGRAPHIC COVERAGE: North America, Europe (UK)
SECTOR COVERAGE: Energy; Health Care; Industrials; Information Technology; Materials; Telecommunication Services
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Institutional; Corporate
SERVICES OFFERED: Access to Industry Experts; Custom Market Research
DESCRIPTION
Intota is an expert network service offering expert consulting, expert witness services and expert-based research. The firm connects business, technical, financial and legal professionals to over 10,000 screened peer-recommended experts in over 30,000 areas of science, engineering, medicine/healthcare, regulation, and business. Intota experts do not pay to be listed, but instead are chosen for inclusion based on competency and suitability. The firm's network of experts cover all areas of science and technology, as well as topics such as intellectual property, patent law, concept validation, prototyping, materials sourcing and contract manufacturing. Intota is owned by Guideline, a market research firm.
Intota expert services cover a wide variety of needs such as market research, product development, materials sourcing, manufacturing production, and litigation consulting. Experts may be engaged for quick telephone or e-mail consulting or extended consulting engagements which may include both remote and on-site work. Intota's suite of research capabilities includes Custom Market Research, Strategic Intelligence and On-Demand Research. Custom Market Research services include: preliminary market assessments, technology assessments, customer needs assessments, in-depth market analysis, competitive landscape analysis, company research and profiling, competitive benchmarking and intellectual property research and analysis.
STRENGTHS
Intota's expert network is particularly strong in covering topics related to science, industrials, and technology. The firm offers transparent pricing and on-demand expert access.
WEAKNESSES
No information about Intota's compliance capabilities.
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Maven Research, Inc. 505 Montgomery Street, 11th Floor San Francisco, CA 94111 YEAR FOUNDED: 2008 United States www.mavenresearch.com TEL: 415 359 9582 FAX: 415 358 4247
GEOGRAPHIC COVERAGE: Global
SECTOR COVERAGE: All Sectors
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Institutional; Corporate; Hedge Funds; Sell Side; Private Equity Firms
SERVICES OFFERED: Access To Industry Experts; Custom Surveys
DESCRIPTION
Maven Research, Inc. is an online expert network and consulting platform. Like all expert networks, the firm connects professionals of all kinds with industry professionals for short- duration telephone consultations and custom surveys. What is differentiated about Maven is its technology platform which offers direct, transparent, and transactional access to the entire network without up-front fees, subscriptions, or middlemen. The firm's marketplace approach allows clients to make decisions about the costs of engaging with specific experts at the time when they are engaged, as opposed to making any upfront commitments. The consultation and survey systems allow clients to only pay for what they actually consume.
Maven Research allows its clients to perform their own private searches of its network and engage directly with relevant experts. Maven aims to make appropriate introductions, ensure privacy and confidentiality, and then allows clients to move forward as they see fit. Maven’s compliance system is focused on providing clients with tools to set their own criteria for expert recruitment
STRENGTHS
Impressive technology platform allows fast, automated, private searching and recruitment of experts based on custom client criteria. The flexible and transparent pricing model should appeal to many different types of clients.
WEAKNESSES
As an early-stage firm, it remains to be seen whether Maven can successfully provide the level of client service and network depth needed by institutional clients.
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MEDACorp One Federal Street, 37th Floor Boston, MA 02110 YEAR FOUNDED: 1996 United States www.leerink.com/medacorp.aspx TEL: 617 248 1601 FAX: 617 918 4500
GEOGRAPHIC COVERAGE: North America
SECTOR COVERAGE: Health Care
BUSINESS MODEL: Investment Bank (owned by Leerink Swann & Co.)
PRIMARY CLIENTS: Institutional
SERVICES OFFERED: Access to Industry Experts; Meetings and/or Conferences; Surveys; Written Research Reports; Access to Management
DESCRIPTION
MEDACorp, a division of investment bank Leerink Swann & Co., provides biomedical consulting and expert network services to institutional investors and life sciences companies. MEDACorp has one of the deepest healthcare networks, with more than 25,000 academics, physicians, biomedical professionals and regulatory experts worldwide. MEDACorp works with investors and corporate clients to offer access to up-to-date scientific, clinical, and healthcare market information.
MEDACorp's Service suite is extremely focused, in that they only provide biomedical consulting services to companies within the industry and investors. In affiliation with Leerink Swann & Company, a Boston-based, healthcare investment bank, MEDACorp translates expert assessments of medical technology into financial conclusions. This allows MEDACorp to not only discern the qualitative prospects for an emerging healthcare product, but also to project a product's future sales and potential value.
STRENGTHS
MEDACorp recorded extremely high ratings across the board. On an overall basis, MEDACorp placed first for Uniqueness of Experts, Depth of Coverage, Customer Support, Speed of Matching, Survey Capabilities, and Other Services, and also placed 3rd for cost effectiveness. Customers were practically unanimous in praising MEDACorp’s strength in healthcare, with only a few expressing dissatisfaction that it did not cover more sectors.
While other firms that started as healthcare networks have since become generalist providers, MEDACorp retains a razor-sharp focus on the single sector where it is widely perceived to be the strongest provider. MEDACorp’s association with a leading healthcare investment bank gives it a
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great deal of prestige among experts, and allows it to hold events, meetings, and conferences that are well attended and highly valued by clients.
WEAKNESSES
Based on the customer feedback received, MEDACorp’s only real area of weakness was Match Quality, where it ranked 5th out of 10 firms. Also, MEDACorp refused to disclose information about its compliance systems to Integrity Research.
MEDACorp Ratings Summary
Note: Compliance ratings for MEDACorp not provided as MEDACorp failed to supply Integrity Research with a completed compliance questionnaire.
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Medical Consulting Referral Inc. One Beacon Street, 34th Floor Boston, MA 02108 YEAR FOUNDED: 2003 United States www.ssrp.com/mcri.php TEL: 617 532 6413 FAX: 617 532 6402
GEOGRAPHIC COVERAGE: North America
SECTOR COVERAGE: Health Care
BUSINESS MODEL: Investment Bank (owned by Summer Street Research Partners)
PRIMARY CLIENTS: Institutional; Corporate
SERVICES OFFERED: Access to Industry Experts
DESCRIPTION
Medical Consulting Referral Inc. (MCRI), a division of Summer Street Research Partners, is a healthcare research firm that obtains information through a number of proprietary sources, including a network of experts. This network includes over 4,000 physicians, scientists and industry professionals. Summer Street Research Partners is an institutional equity research and trading firm that focuses exclusively on the healthcare sector.
MCRI provides direct expert access, research updates, educational seminars and private consulting sessions for its clients.
STRENGTHS
Healthcare focus
WEAKNESSES
Limited network compared to other healthcare specialists and some of the generalist firms; lack of disclosure about compliance capabilities
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Nemo 120 Old Broad Street, London, EC2N 1AR YEAR FOUNDED: 2009 United Kingdom www.nemosearch.com TEL: 44 20 7763 2299
GEOGRAPHIC COVERAGE: Europe; Asia Pacific (India)
SECTOR COVERAGE: All Sectors
BUSINESS MODEL: Investment Bank (owned by the Noble Group)
PRIMARY CLIENTS: Institutional; Hedge Funds; Private Equity Firms
SERVICES OFFERED: Meetings and/or Conferences; Channel Checks; Custom Research; Access To Industry Experts
DESCRIPTION
Nemo, a subsidiary of Noble Group, is a network of experts that provides insights to institutional investors, private equity houses, M&A practitioners and corporate management. Nemo offers its clients investment hypothesis testing/support, management due diligence, insight, M&A origination and market entry and diversification. In the UK the firm focuses on the climate change, healthcare, financial, insurance, leisure, media, support services and technology sectors. The firm offers access to its Indian expert network which specializes in consumer, energy, financial services, infrastructure and technology sectors, as well as access to the government. Nemo will support client requests outside of its primary sectors. Nemo emerged from Noble's in-house expert sourcing capability and fundamental approach to equity research.
Nemo serves its clients by setting up an initial assessment to understand the project context, timing and issues before moving into a specialist search and matching phase. If the firm doesn't already have the necessary connections it will actively find and evaluate experts to set up with its clients. The firm only charges clients for expert consultations that they choose to carry out.
STRENGTHS
UK and India focus; robust compliance systems for European provider
WEAKNESSES
As a relative newcomer, it remains to be seen whether Nemo can scale its expert network offering to compete with larger players.
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Primary Global Research 424 Madison Ave. New York, NY 10017 YEAR FOUNDED: 2003 United States www.pg-research.com TEL: 212 380 3479 FAX: 800 650 0340
GEOGRAPHIC COVERAGE: North America; Europe; Asia Pacific
SECTOR COVERAGE: Consumer Discretionary; Consumer Staples; Energy; Health Care; Industrials; Information Technology; Materials; Telecommunication Services; Financial Services
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Institutional; Hedge Funds
SERVICES OFFERED: Access To Industry Experts; Written Research Reports; Meetings and/or Conferences; Channel Checks; Custom Research; Custom Surveys
DESCRIPTION
Primary Global Research (PGR) is an expert network that provides market intelligence to institutional buy-side money managers and analysts through its Global Advisory Team of Experts (GATE) Network under the coordination of a team of in-house analysts. The firm differentiates itself from its larger competitors by offering more customized service to its clients. It maintains a limited client base and focuses on the following sectors: technology, healthcare, retail, financial and industrial/energy. It also has a presence in Asia (headquartered in Taiwan, with offices in the Philippines as well)
Although it has recently expanded its sector coverage, the firm's greatest strength is in the technology and telecommunications sectors. The company provides customized research reports, direct consultation with experts, self initiated analyst reports, conferences, and seminars. Primary Global is well regarded for its in-house analysts, particularly in the technology sector. Unlike many expert networks, Primary Global has a ‘push’ research model that delivers written notes and updates, based on expert input, to clients. The firm has set up a brokerage subsidiary, PGR Securities, with direct trading capabilities for asset management clients that prefer to pay for services with direct trades.
STRENGTHS
Primary Global received Integrity's Top Pick as a technology specialist in our 2009 ResearchFocus report on Expert Networks. Clients commented favorably on PGR’s strong coverage of technology and healthcare. While Primary Global Research also covers several other sectors, most clients we spoke to view Primary Global as being strongest in the technology sector.
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Primary Global received solid scores across various metrics, ranking 4th for Customer Support and for Other Services. Unlike most expert networks, Primary Global has a ‘push’ research model that delivers written notes and updates, based on expert input, to clients. This seemed to be popular with clients, as it allows them to gain additional value from Primary Global’s network even when they are not engaging in direct consultations. Decent performance on all metrics garnered the top pick for Primary Global in the technology specialist category.
The firm has also developed a considerable number of experts in Asia which should stand the firm in good stead as clients look for unique investment ideas in Asia and the Pacific Rim.
WEAKNESSES
Based on the client feedback we received, Primary Global did not rank well in terms of network depth or uniqueness of experts.
Primary Global Ratings Summary
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Primary Insight, LLC 909 3rd Avenue, Suite 2958 New York, NY 10022 YEAR FOUNDED: 2005 United States www.primary-insight.com TEL: 212 272 6718
GEOGRAPHIC COVERAGE: Global
SECTOR COVERAGE: Consumer Discretionary; Consumer Staples; Energy; Financials; Health Care; Industrials; Information Technology; Materials; Telecommunication Services; Utilities; Construction and Real Estate; Government and Legal
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Hedge Funds; Asset Managers; Private Equity Firms
SERVICES OFFERED: Access to Industry Experts; Channel Checks; Custom Research; Consulting
DESCRIPTION
Primary Insight is an expert network service with over 30,000 industry experts. Primary Insight was originally developed within the Bear Stearns Companies, and completed a management buyout from J.P. Morgan in 2009, which retains a minority strategic interest in the firm and a seat on the Board. Also in 2009, the firm opened offices in London and Shanghai to expand its global offerings.
Primary Insight provides clients with access to consultants and experts in Healthcare, Technology, Media, Telecommunications, Energy, Basic Materials, Industrials, Consumer Goods, Financials, Construction and Real Estate, and Business Services. The core practice of the company is twofold: to facilitate live phone consultations with industry experts, who have been either custom-sourced, or accessed from a database of 30,000. Additional services include: industry roadmaps (with particular focus on Asia), expert surveys, topical roundtables, and conference summaries/ meetings. The structure of these additional products is tailored to the client’s individual project and research needs, thus reiterating Primary Insight’s custom approach.
STRENGTHS
The firm has recently opened new offices in Shanghai and London, in order to better service its existing global client base, 25% of which are based in the UK. Plans are also underway to extend office capabilities to India and South America. Some clients commented positively about Primary Insight’s custom recruiting capabilities, noting that recruitment may sometimes take longer but that the results are usually worthwhile.
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WEAKNESSES
Primary Insight recorded below-average customer feedback on a range of different criteria, including "Match Quality", “Speed of Matching” and “Cost Effectiveness”.
Primary Insight Ratings Summary
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PRNewswire - ProfNet 350 Hudson St. New York, NY 10014 YEAR FOUNDED: 1992 United States profnet.prnewswire.com TEL: 866 736 9837 FAX:
GEOGRAPHIC COVERAGE: North America
SECTOR COVERAGE: All Sectors
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Corporate
SERVICES OFFERED: Access to Industry Experts
DESCRIPTION
Originally founded in 1992 as a way for reporters to find sources for stories within academia, ProfNet is now a service that allows a range of clients, from corporations and government to the investment community, to connect to over 30,000 experts. The core of the network is built around 14,000 "communicators" (or PR professionals) at academic and business institutions, who help ProfNet users connect to the most appropriate expert within their respective institutions.
ProfNet experts are available to speak at conferences, provide source information for books and reports, consult on corporate projects, and speak to financial analysts regarding their industry or topic of specialization. The intermediation is done through PR professionals, as well as ProfNet's online software, which allows users to quickly and easily browse responses to their questions, target searches by state or region, search expert profiles by institution type, and manage access to requests on a case-by-case basis.
STRENGTHS
Tool used by journalists to develop sources
WEAKNESSES
Not focused on serving financial clients; limited compliance capabilities.
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Public Insight LP 1600 Shattuck Avenue, Suite 226 Berkeley, CA 94709 YEAR FOUNDED: 2007 United States www.public-insight.com TEL: 510 704 1111 FAX: 510 704 1113 GEOGRAPHIC COVERAGE: Global (emphasis on state/local and municipal coverage) SECTOR COVERAGE: Legal and Regulatory issues pertaining to all highly regulated sectors: Health Care, Energy, Environment, Homeland Security, Antitrust, Telecom, Utilities, Gaming, etc. BUSINESS MODEL: Independent PRIMARY CLIENTS: Institutional SERVICES OFFERED: Access to Legal, Policy, and Regulatory Experts; Custom Surveys; Forecasts and Issues Monitoring
DESCRIPTION Public Insight LP is both an expert network and proprietary regulatory research provider focused on sourcing ex-government employees, lobbyists and others knowledgeable about public policy. Founded by Jonathan Spalter, ex-CIO of the US Information Agency, the firm aims to help institutional investors make better investment decisions through regulatory and public policy due diligence, research, and risk management services. Public Insight also cultivates contacts outside the US. Attorneys, economists, lobbyists, and former elected and appointed officials may participate in consultations through the firm's Public Insight Analyst Network. Consultations mostly focus on state-level and national policy, regulatory, and legislative issues of concern to institutional investors. Public Insight has the ability to set clients up with experts on an exclusive basis if needed. Public Insight also provides clients with customized research services, including surveys, reports, forecasting and investment analysis projects.
Public Insight has built a State & Local practice, a Federal practice, and an International practice. State & Local Research Network Members cover all 50 states and key municipalities, and include state-level regulatory and policy analysts, regulatory attorneys, local lobbyists, and former elected officials and senior appointees. Federal Research Network Members include regulatory and policy experts who have served at senior levels in the White House, key regulatory agencies, Cabinet Departments, and Congressional staffs from both major parties as well as veteran DC legal and regulatory experts and economist. Public Insight also provides coverage of highly regulated sectors in key international markets, including the European Union, Asia/Pacific, Africa, and Latin America.
STRENGTHS Access to extensive regulatory and political expertise.
WEAKNESSES No customer feedback received by Integrity.
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Reuters Insight 3 Times Square New York, New York 10036 YEAR FOUNDED: 2006 United States www.reutersinsight.com TEL: 646 223 4000 FAX: 646 223 4588 GEOGRAPHIC COVERAGE: North America; Europe; Asia Pacific SECTOR COVERAGE: Consumer Discretionary; Health Care; Information Technology; Telecommunication Services BUSINESS MODEL: Independent PRIMARY CLIENTS: Institutional; Corporate SERVICES OFFERED: Custom Research; Surveys; Access to Industry Experts DESCRIPTION Reuters Insight is an expert network built around Reuters' global staff of journalists and editorial personnel in 140 countries. Reuters Insight has over 60% of its experts specializing on the healthcare, tech, telecom and media sectors. The company's technology practice is focused on all aspects of the technology supply chain, from semiconductors and components to mobile handsets and displays. STRENGTHS Reuters Insight scored well on Match Quality and especially well on its survey capabilities and other services.
WEAKNESSES Future of the service under Thomson Reuters ownership remains unclear.
Reuters Insight Ratings Summary
Note: Compliance ratings for Reuters Insight not provided as Reuters Insight failed to supply Integrity Research with a completed compliance questionnaire.
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Riedel Global Experts 245 Park Avenue, 24th Floor New York, NY 10167 YEAR FOUNDED: 2009 United States www.riedelglobalexperts.com TEL: 917 587 7717 [email protected]
GEOGRAPHIC COVERAGE: Emerging Markets
SECTOR COVERAGE: All Sectors
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Institutional; Hedge Funds
SERVICES OFFERED: Access to Industry Experts; Custom Research
DESCRIPTION
Riedel Global Experts is a network of emerging market industry leaders, executives, specialists and other professionals who consult directly with institutional investment clients. Riedel’s network of experts help clients answer questions on key industry issues and specific questions about markets, trends, competitive landscape and individual companies. Riedel employs over 30 analysts in 15 countries to provide local insights into emerging market companies through Riedel Research Group. These analysts provide access to various networks within their market. In addition, the firm has several regional partners who identify industry experts for client consultations.
Riedel works closely with clients to formulate questions, identifies and vets appropriate experts, and schedules confidential telephone consultations. On-call interpretation services and transcription services are available. Clients may utilize Riedel Global Experts in combination with Riedel Research Group's equity research.
STRENGTHS
Riedel Research Group has analysts on the ground in 15 emerging market countries; Riedel Global Experts is able to use the local contacts and insight of these analysts to find the right experts.
WEAKNESSES
No customer feedback received by Integrity.
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Roulston Research 27900 Chagrin Blvd Suite W211 Beachwood, OH 44122 YEAR FOUNDED: 2006 United States www.roulstonresearch.com TEL: 216 765 0566 [email protected] GEOGRAPHIC COVERAGE: North America SECTOR COVERAGE: Energy; Industrials; Financials; Healthcare; Information Technology; Consumer BUSINESS MODEL: Independent PRIMARY CLIENTS: Institutional; Hedge Funds SERVICES OFFERED: Access to Industry Experts; Meetings and Conferences; Idea Forums DESCRIPTION Roulston Research is an independent institutional research firm that seeks to find and network unique industry resources with buy-side participants. The company has a number of practice areas which are roughly equivalent to the practices of other expert networks, where clients join a practice area and are charged a flat fee per year. The practice areas are chaired by industry experts, who use their professional networks to identify the speakers or experts who are qualified to answer the questions of the community, or of an individual client within a community.
Roulston Research organizes periodic forums for clients with industry experts, public company managements and buy side analysts. Currently, the firm hosts Idea Forums, Roundtables, and Conferences, with each event having a theme devoted to a specific sector or segment of the market. Reports are written from participant comments on individual stocks at each forum. These comments are published anonymously in reports which are then distributed to RBR clients to provide value-added insight. STRENGTHS Roulston's product offering is unique in that it provides clients with multiple ways to leverage the expertise of industry experts or the communities themselves. Idea Forums and roundtables with multiple experts helps to foster different views from industry thought leaders. The service is also restricted to a limited number of buy-side participants, thus creating some scarcity value for RBR’s network. The small, highly selective network helps to ensure high quality of experts and avoidance of some common compliance issues (no public company employees are involved). Lastly, the price for the service is extremely cost effective. WEAKNESSES Compliance systems are not comprehensive when compared to major expert networks – although Roulston argues that such systems are unnecessary for a small, selective network of senior level consultants and retired executives, who are briefed on and familiar with insider information laws.
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The Round Table Group 601 Pennsylvania Ave., NW Suite 900 / South Building YEAR FOUNDED: 1994 Washington, DC 20004 www.roundtablegroup.com TEL: 202 595 2000
GEOGRAPHIC COVERAGE: North America
SECTOR COVERAGE: All Sectors
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Litigators; Corporate
SERVICES OFFERED: Expert Witness Search and Referral
DESCRIPTION
The Round Table Group (RTG) is an expert network that provides access to over 100,000 academic and industry experts who serve as consultants and expert witnesses. The primary focus of the firm is connecting litigators with expert witnesses and consultants. RTG was one of the first expert networks, and is regularly used by leading law firms.
STRENGTHS
Broad number of practice areas, excellent network depth. Clients rate RTG’s search and vetting procedures very highly.
WEAKNESSES
No longer serving financial services clients.
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Sermo 215 First Street Cambridge, MA 02142 YEAR FOUNDED: 2005 United States www.sermo.com TEL: 617 497 1110 FAX:
GEOGRAPHIC COVERAGE: North America
SECTOR COVERAGE: Health Care
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Corporate
SERVICES OFFERED: Access to Industry Experts; Custom Surveys
DESCRIPTION
Sermo is an online community of physicians, who use the network to aggregate observations from their daily practice, challenge or corroborate each other's opinions, discuss emerging trends and new insights on medications, devices and treatments. Sermo clients include leading healthcare companies and government agencies: any organization that benefits from early insight into clinical events. These parties create a financial incentive that is used to generate, sustain, and support participation in Sermo’s online physician community.
Sermo's clients are able to use its network to: forecast potential problems or new uses for commercially significant medical products and therapies; gain early insight into outbreaks and other changes in disease states and conditions that can affect the public health; perform epidemiologic research investigations; perform real-time surveys of the opinion of practicing physicians on topics related to medical care; assess the success and adoption of best practice recommendations. Clients pay a subscription fee and in return can post questions to the Sermo community. Sermo has stopped actively marketing to new financial services clients, and is focused on serving corporate clients.
STRENGTHS
Focusing entirely on healthcare, Sermo provides a very deep network of doctors that are easily accessible to clients.
WEAKNESSES
Sermo has stopped actively marketing to new financial services clients, and is focused on serving corporate clients.
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SinoTouch
YEAR FOUNDED: 2007 www.sinotouch.com TEL: 86 10 8257 1581
GEOGRAPHIC COVERAGE: Asia Pacific (China)
SECTOR COVERAGE: Technology, Media, Telecommunications, Industrials, Energy, Real Estate, Retail
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Hedge Funds; Private Equity Firms
SERVICES OFFERED: Access to Industry Experts; Events and In-Person Meetings; Custom Surveys; Seminars
DESCRIPTION
SinoTouch provides institutional investors with access to Chinese industry experts, including past and present executives, sales and management staff, government officials and policy makers, and other industry participants.
SinoTouch provides investors with an extensive range of services, from channel checks and one- on-one consultations to fully-managed custom research projects and proprietary analysis. As most of the experts in this network are not native English speakers, SinoTouch provides investors with translators as a complimentary part of its package. SinoTouch currently has 10,000 experts in its own network.
STRENGTHS
SinoTouch provides a comprehensive and flexible range of services to foreign investors looking at China. The firms has good access to Chinese government and policy experts.
WEAKNESSES
Clients may have concerns about differences in compliance practices between China and Western markets, which may place some of SinoTouch's experts, particularly in government, off limits.
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Success Stories Media, Inc. 163 Amsterdam Ave, Suite 222 New York, NY 10023 YEAR FOUNDED: 1997 United States www.successstories.com/sshome.htm TEL: 212 579 3728 FAX: 212 579 3785
GEOGRAPHIC COVERAGE: Japan
SECTOR COVERAGE: All Sectors
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Corporate; Institutional; Hedge Funds; Private Equity
SERVICES OFFERED: Written Research Reports; Industry/Sector Analysis; Access To Industry Experts; Company/Industry Analysis
DESCRIPTION
SUCCESS STORIES: JAPAN Executive Newsletter--a service of Success Stories Inc. (SS)--offers a corporate and investment research information service focused on Japan. Since 1997, Success Stories has been a resource for senior Japan-oriented corporate and investment executives worldwide who are interested in growing their companies and profits in Japan. By serving Japan- oriented corporate executives, the firm stays close to market events which have both strategic corporate and investment impact. They have developed a proprietary expert network database of over 14,000 Japan-experienced executives and investors, which allows them to undertake custom research projects for both the corporate and investment communities. The firm is fully focused on Japan only.
STRENGTHS
Success Stories network contains a number of experienced Japanese business professionals with deep industry expertise.
WEAKNESSES
Predominantly focused on corporate clients, Success Stories has limited compliance capabilities from an institutional investor standpoint.
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Techdirt Insight Community 440 N Wolfe Rd Sunnyvale, CA 94085 YEAR FOUNDED: 1997 United States www.insightcommunity.com TEL: 888 930 9272
GEOGRAPHIC COVERAGE: North America
SECTOR COVERAGE: Information Technology, Telecommunications, and Media
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Corporate
SERVICES OFFERED: Access To Industry Experts; Custom Expert Analysis
DESCRIPTION
Techdirt’s Insight Community is an eclectic mix of expert network, online discussion group consolidator and business service provider. Techdirt’s insight community is made up primarily of industry professionals, consultants, and analysts, who can help clients to evaluate various kinds of business questions (“cases”) relating to Techdirt’s core areas of strength: tech, telecom, and media.
Participants in the Insight Community are compensated in exchange for providing analysis and discussion of client questions. This model is differentiated from a standard expert network: As opposed to most expert networks which specialize in one-on-one consulting, the Techdirt community aims to provide a more open, conversational form of expert access: Participants in the community may comment on other’s analyses, giving clients the benefit of the entire community’s insight as opposed to the potentially idiosyncratic views of a single expert.
STRENGTHS
Focus on technology; community forum provides access to diversity of viewpoints.
WEAKNESSES
Predominantly serves corporate clients; no information provided on compliance procedures.
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Tribeca Insights 1120 Avenue of the Americas, 7th Floor New York, NY 10036 YEAR FOUNDED: 2008 United States www.tribecainsights.com TEL: 646 863 5876
GEOGRAPHIC COVERAGE: North America; Europe; Asia Pacific
SECTOR COVERAGE: All Sectors
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Hedge Funds; Private Equity Firms
SERVICES OFFERED: Access To Industry Experts; Meetings and/or Conferences; Custom Research
DESCRIPTION
Tribeca Insights is an expert network founded in early 2008. The firm specializes in custom recruitment of experts across all sectors and industries, primarily in North America and UK/Europe, and to a lesser extent in the Asia-Pacific region. The firm has an existing network of around 10,000 industry professionals; however, its primary strength is in recruiting untapped experts from outside of its network to serve custom client needs.
The main focus of the expert recruitment process is to find current industry professionals as opposed to retired or independent consultants. Tribeca claims that around 90% of the experts sourced are “proprietary” and do not participate in other networks. The firm aims to turn around custom projects within 1-3 days and its services are competitively priced. Tribeca Insights offers its services on a transactional basis - there is no subscription fee, and clients pay only for successful calls with experts. Clients can opt to buy a package consisting of a set number of expert calls; these calls do not expire at any pre-determined time.
STRENGTHS
Clients comment favorably about Tribeca Insight’s “excellent recruiting efforts” and “friendly staff”. Although the firm is “relatively new”, clients say they are “getting better every day”.
WEAKNESSES
Relatively recent entrant with limited compliance capabilities; however, Tribeca has over the last year made efforts to build out its compliance capabilities. Currently, these systems allow for customized compliance criteria per client, as well as expert education in the form of tutorials and consultation reminders.
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VeriMed Healthcare Network 2426 Embassy Dr. West Palm Beach, FL 33401 YEAR FOUNDED: 2002 United States www.VeriMedhealthcare.com TEL: 800 229 0781 FAX: 212 820 9708
GEOGRAPHIC COVERAGE: North America
SECTOR COVERAGE: Health Care
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Institutional; Corporate
SERVICES OFFERED: Access to Industry Experts; Custom Market Research; Custom Surveys; Focus Groups
DESCRIPTION
VeriMed Healthcare Network provides expert network and consulting services to institutional investors and life sciences companies. VeriMed's network consists almost entirely of practicing clinicians and scientists from elite medical centers and academic institutions. The firm's experts represent all medical subspecialties. Doctors range in level of expertise from industry leaders to residents and fellows in the trenches of medicine.
In addition to the expert network services, VeriMed conducts focus groups, custom physician surveys, and creates and reviews healthcare-related content for publication.
STRENGTHS
VeriMed screens all experts based on academic and professional achievement before they are admitted to the network. This ensures a relatively high level of expert quality. VeriMed has no subscription fees. They have an a la carte model which may save clients money in the long run.
WEAKNESSES
Low market penetration among financial services clients.
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Zintro, Inc. 1050 Winter Street, Suite 1000, Waltham, Massachusetts 2451 YEAR FOUNDED: 2009 United States www.zintro.com TEL: 781 810 4662
GEOGRAPHIC COVERAGE: Global
SECTOR COVERAGE: All Sectors
BUSINESS MODEL: Independent
PRIMARY CLIENTS: Hedge Funds; Corporate; Consulting Firms; Private Equity & Venture Capital
SERVICES OFFERED: Access to Industry Experts
DESCRIPTION Zintro is a technology platform that connects clients with expert professionals. The purpose of the Zintro platform is to simplify the process for clients to find, contact, qualify, and convince experts in the field to talk with them on an ad hoc basis. The firm employs several measures to ensure the quality of the experts responding to client inquiries. Stuart Lewtan, Founder of Zintro, was previously Founder and CEO of Lewtan Technologies, an information & software provider to the asset-backed securities industry.
The process is mostly automated: After a client fills out a brief inquiry form, Zintro matches the inquiry against expert profiles and forwards the anonymous inquiry to experts who might be a good fit. Experts who are qualified and interested reply by sending a brief electronic proposal to the client. Client and expert can further qualify each other at this stage by exchanging messages. When a client accepts a proposal, the connection is made. The client and expert agree on a time to talk and a private call-in number is provided to each. After the call, Zintro collects money from the client and pays the expert his/her fee.
In addition to connecting clients and experts for fee-based phone consultation, Zintro can also be used to connect clients with consultants, contractors, and vendors for project-based and/or long-term relationships. Payment is entirely transactional.
STRENGTHS Fully automated platform; transactional pricing model
WEAKNESSES Does not draw on expertise provided by in-house recruitment specialists.
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DISCLOSURE
INTEGRITY RESEARCH ASSOCIATES LLC publishes reports providing information on investment research firms and other selected companies. INTEGRITY RESEARCH ASSOCIATES LLC is not a registered investment advisor or broker-dealer.
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