Morningstar Shines Despite Economy's Dark Passage
Morningstar Inc., the Chicago-based company best known for rating mutual funds, isn't slowing down its quest to become an international investment research powerhouse despite the gloomy global economy.
With the announced purchase today of United Kingdom-based Fundamental Data Limited, Morningstar CEO Joseph Mansueto continues bulking up the firm's research capabilities beyond its original U.S. border. Morningstar isn't paying a King's Ransom for the U.K. concern-- only $19 million -- but the purchase is another indication that Mansueto is determined to grow globally, even in the face of severe worldwide financial markets disruption.
That's an impressive strategic vision for Mansueto, a University of Chicago MBA, who launched Morningstar from his Chicago apartment over 20 years ago. In its early stages, Morningstar was a pioneer at providing individual investors with information about the burgeoning mutual fund industry, eventually devising its well-known star rating system that's become a Morningstar hallmark used by investors worldwide.
Not satisfied with only that slice of the investing research business, Mansueto aggressively pushed Morningstar into other sectors, including assessing individual industries and sectors, companies and equities. Now a publicly-traded concern with billionaire Mansueto owning a 60 percent ownership stake, Morningstar is making a bigger splash on the global stage by branching out into 18 countries throughout Europe, Australia and Asia.
"Its expansion internationally over the past decade looks to try and replicate its success in the U.S.," said a recent WR Hambrecht & Co report.
Still, some are concerned that turmoil within the investment banking ranks will hurt Morningstar, which also provides independent research to large Wall Street firms. Investment houses, like Merrill Lynch and Goldman Sachs, that are likely to survive the current shakeout are still expected to cut costs, including contracts to outside vendors such as Morningstar.
Any cost-cutting is expected to impact Morningstar in 2009.
Right now, the company says its on course and will report quarterly earnings at the end of the month. Industry analysts expect it to post an impressive gain.
So despite dark economic times, Morningstar isn't looking to dim the lights on its expansion efforts.