NEW YORK (HedgeWorld.com) – Capital IQ, which developed a company and deal information system for investment banks and private equity funds, will offer a new version of the software with additionalfeatures designed partly for hedge funds.
Hedge funds have been finding a lot of value in the database, said Steve Turner, managing principal. Capital IQ estimates that its clients now encompass 25% of the largest hedge managers. Event- driven, distressed securities, long/short equity and high yield managers are particularly interested. Users include Pequot Capital, Halcyon Management, MacKay Shields and Fortis Asset Management.
Tools that enable managers to screen for investment opportunities on the basis of both standard financial criteria such as company growth, valuation and returns, and qualitative event-driven data, such as bankruptcies and management changes, are among the coming attractions.
The system also provides modeling options for further investigating investment opportunities. Among these features are comparable company analytics and charting. All Capital IQ applications are web based and can be accessed from multiple locations.
The firm’s competitors include FactSet Research Systems Inc., which combines many financial and economic databases on an online platform, and Baseline, which delivers histories of company statistics, earnings estimates, income statements, balance sheets, cash flow statements and the latest numbers for thousands of stocks.
Contacts
The Capital IQ system, introduced about two years ago, integrates company and people data, analytical tools and relationship management. “Users can qualitatively screen criteria to identify companies to invest in,” Mr. Turner explained. “They can also screen events like companies looking for a buyer, a share buyback or a big management change.”
This database covers both public and private companies, with separate profiles for company executives. People records show, for example, what boards that executive sits on and other background information. Users can add their own contacts and related data.
The software enables analysts to see how a company’s performance measures are calculated and to verify the components of the calculation by directly linking them with a highlighted area in the relevant Securities and Exchange Commission filing. “This allows analysts to check the numbers a lot faster,” Mr. Turner commented.
Hedge funds in event-driven strategies might find it particularly useful to search for deals by industry. It is possible to specify a narrow niche within a larger sector and identify the major investors and firms that are buying businesses in that niche. The database shows deals by type, such as leveraged buy-out, and gives recent filings.
A user also can obtain a list of comparable companies in the industry and their financials. Subscribers tracking a certain firm get a link to see the deals it has been involved with, allowing them to investigate past acquisitions and look up counterparties, such as bankers that advised in a merger. Capital IQ employs a team to follow private capital deals and buys public company merger and acquisition information from other providers.
