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BrightScope Acquired By New York Firm

After losing a bidding war with a larger company over a business they both wanted to buy, BrightScope Inc. CEO Mike Alfred decided: if you can’t beat ’em, join ’em.

Alfred and his younger brother, Ryan Alfred, co-founded financial information company BrightScope in 2008 with a former engineer, Dan Weeks. The La Jolla-based business, which launched publicly in early 2009, analyzes public data about retirement plans and financial advisors.

On Nov. 1, Strategic Insight, a private equity-backed data and business intelligence firm with offices in five countries, scooped up the San Diego business for undisclosed terms.

Strategic Insight, which is based in New York with additional offices in Boston, San Francisco, Stamford, Conn., London, Munich, Melbourne, Toronto and Vancouver, was until recently known as Asset International Inc.; the company changed its name in September.

Strategic Buys

The acquisition of BrightScope was the latest in a string of strategic buys for Strategic Insight since its 2014 acquisition by Genstar Capital, a San Francisco-based private equity firm.

In July, the firm closed its acquisition of Market Metrics and Matrix Solutions, which together made up the market research business of Norwalk, Conn.-based financial information and data firm FactSet Research Systems Inc.

The price tag was about $165 million, plus an earnout — a provision that comes into play if the acquired company meets certain financial goals — of $10 million.

Mike Alfred said BrightScope, which wanted to acquire Market Metrics, was “outplayed.”

The silver lining, he said, was becoming aware of the rival firm’s interest in expanding its portfolio of data. When it comes to that, BrightScope has plenty.

Rapid Rise

The firm’s founders gathered and compiled public data for months before the company made its public debut. When it launched in 2009, the company had rated 1,000 retirement plans. A year later, more than 30,000 such plans had BrightScope ratings. Six years after its start, that tally had reached about 50,000 plans. By then, it had also launched a database of financial advisors.

“When (Strategic) beat us out, we decided to approach them about working together,” Mike Alfred said.

He said becoming part of Strategic Insight will likely involve hiring more workers for the La Jolla office; its 70 employees will remain with the company as it integrates with Strategic Insight.

“This is going to be the beating heart of the technology organization of the larger company,” he said. “It’s going to grow.”

Globally, Strategic Insight employs 535 people, including the team at BrightScope.

By acquiring BrightScope, the company now has a location in Southern California.

SoCal Presence

That’s of interest to Genstar, the West Coast-based private equity firm that backs Strategic and other companies in the financial services, software, industrial technology and health care industries, according to its website.

“There’s a real need and a reason to have a presence in this region,” Alfred said, with major players in the financial services industry, including mutual fund giants PIMCO and Capital Group, based in Newport Beach and Los Angeles, respectively.

“It makes sense strategically and geographically,” he said.

As part of the acquisition, the Alfred brothers will take on senior roles at Strategic Insight and join the company’s eight-person global executive committee, which reports to CEO Joel Mandelbaum.

Acquiring the San Diego firm expands Strategic’s “data offering and research and development capacity,” Mandelbaum said in a statement when the acquisition was announced. The company said it wants to become “the industry’s one-stop shop for data and insights.”

The move comes amid consolidation among asset management firms.

In October, Denver investment manager Janus Capital Group and the Henderson Group, a London-based firm, announced they would merge; later that month, Boston-based Eaton Vance said it would acquire the Bethesda, Md., company Calvert Investment Management.

“I wanted to put the company in a position where we can have the best platform and data to serve our constituents,” Mike Alfred said. “Being a single-solution vertical company is going to be a challenge going forward.”

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