Morgan Stanley to acquire Barra for $814 million.
Morgan Stanley will acquire Barra, Inc., a leading provider of risk-management software and services to institutional investment managers, for approximately $816.4 million or $41 per share. Barra's operations, which are headquartered in Berkeley, Calif., will be combined with Morgan Stanley Capital International (MSCI) to provide benchmark indices and risk-management analytics.
The transaction is expected to close in 60 to 120 days, pending regulatory and Barra-shareholder approval. "The combination of MSCI's deep understanding of indices across asset classes and Barra's industry-leading risk-management analytics will provide a powerful platform for enhancing our clients' investment processes within and across asset classes," states Henry Fernandez, president and chief executive officer of MSCI.
BearingPoint reports lack of data standards in risk management and compliance hampers growth.
A survey of leading financial-services institutions commissioned by BearingPoint, Inc. finds that wasteful spending and duplication of efforts around risk management and compliance are due to the absence of data standards. Without addressing the data issues first, the financial-services industry could struggle to complete mergers or acquisitions as well as achieve overall growth.
The global survey of 190 executives, conducted in the fourth quarter of 2003 by the Economist Intelligence Unit for BearingPoint, found that only 18 percent of respondents say their risk solutions link up with their customer-relationship management systems. Just 37 percent of respondents say their risk solutions link with customer-data repositories and less than 50 percent say their risk solutions link up with enterprise-wide financial general-ledger and MIS (management information systems) systems.
In the release, Christopher Formant, BearingPoint's executive vice president, financial services, says, "... spending (by financial institutions) has become reactionary and ineffective because across enterprises, operating and data management structures are in direct conflict with risk-management structures. Documenting and demonstrating compliance can also incur additional costs into the millions. In particular, access and retrieval costs have become onerous."
To obtain a copy of the survey, go to www.bearingpoint.com/riskstudy
SunGard's Front Capital Systems acquires Derivatech.
Front Capital Systems, an operating unit of SunGard, acquired Chicago-based Derivatech Risk Solutions, a provider of foreign-exchange (FX) derivatives pricing, analytics and risk-management systems. Terms of the acquisition were not disclosed.
Derivatech was founded in 1996 and has offices in New York, London and Chicago. Its dtCompass trading and risk-management system for FX derivatives is currently used by leading FX players, says SunGard.
The dtCompass solution, which will continue to be sold as a stand-alone product, will augment Front's existing FX options offering in the Front Arena product suite.
Front Arena is a front-to-back-office trading system that covers multiple asset classes including equities, foreign exchange and money markets, fixed income and repurchase agreements, interest-rate derivatives, and credit derivatives. Derivatech's products include complex volatility surface modeling; flexible pricing and valuation of exotic options and structured products in real time; an extensive set of risk derivatives calculated from a volatility surface; a model development kit; strip pages, and other features.