TIM Group acquired by Mergermarket Group

What is the news and when did it happen?

Mergermarket Group acquired TIM Group on Wednesday 24th May 2017.

What does TIM Group do?

Founded in 2002, TIM Group operates the world’s largest trade ideas network. The company specialises in the electronic distribution of trade ideas and investment recommendations.

With offices in London, New York and Hong Kong, TIM Group works with more than 4,000 equity sell-side contributors at 300 investment banks and brokerages. Combining insights from those institutions with TIM’s services results in the world’s leading end-to-end trade ideas platform for sell-side contributors and buy-side recipients.

What is the TIM network?

TIM Group operates a unique worldwide network comprising 300 professional, regulated investment banks, brokerage firms and research providers sending trade ideas to more than 250 subscribing buy-side firms. More than 250,000 unique ideas per year are sent across the TIM network.

Sales teams at brokers enter trade ideas into the TIM platform, designating the clients to whom they want them distributed. TIM makes the data available to those clients via email, a desktop interface, or low-latency APIs, and measures the performance of the ideas against the clients’ chosen benchmarks.  Buy-side clients reward the brokers for the positive impact trade ideas have on their funds’ performance.

TIM provides the platform, services and analytics to both brokers and their clients, including performance profiles (alpha profiles) over time, aggregated statistics across contributors and stocks, and advice on creating and managing idea programs.

Why do investment managers join the network?

TIM’s network and analytics provide investment managers with demonstrably predictive insight into future stock prices. TIM Group’s 13-year archive of trade ideas allows the buy-side to backtest strategies against actual trade idea history. TIM Group’s expertise and technology help buy-sides identify contributors with track records matching their investing and trading requirements. For investment managers seeking to comply with MiFID II, trade ideas provide a compliant mechanism for rewarding sell-side insight.

Why do brokers join the network?

Trade ideas’ share of commissions has increased from 4% to nearly 16% in the last 12 years. TIM’s network allows brokers to reach the broadest buy-side base of investors seeking alpha. Transparent tools and built-in reporting ensure contributors are compensated for their contributions in return. TIM provides the sell side with a compliance-friendly platform for communicating with their clients.

Do I have to be a quant to use trade ideas?

While quant funds are adept at finding alpha within trade ideas, fundamental firms and traditional long-only funds are also growing their participation in this space. Trade ideas provide fundamental firms with a quantifiable track record of value as the basis for rewarding brokers, allowing them the option to pay out of client funds under MiFID II. Broker trade ideas can trigger new investment investigations, validate (or invalidate) investment theses, and influence the timing of investment decisions for quants and for other users.

Can brokers really predict which stocks will go up and which will go down?

TIM statistics show that there is demonstrable and consistent alpha in trade ideas, both relative to market and after residualizing for common market factors such as momentum, valuation, industry, and volatility.

How will MiFID II affect TIM Group?

One of regulators’ primary objectives under MiFID II unbundling is to ensure that funds pay for broker services that add value to their clients’ investments. TIM provides solid evidence for both brokers and clients that their ideas add value in the investment process.  Several large buy-sides have established ideas programs to meet MiFID II requirements.

What does Mergermarket Group do?

Mergermarket Group (MMG) is a global digital B2B media company that provides the advisory, corporate and financial communities with intelligence, data and analysis. At its core are 600 journalists and analysts covering 200 geographic markets.

Today, with the inclusion of TIM, the group has 17 platforms in its portfolio. The company is headquartered in London and is majority-owned by private equity firm BC Partners (bcpartners.com).

Why is Mergermarket Group investing in TIM Group?

TIM Group is a trusted source of information for investors searching for alpha, including analytical firms such as quantitative asset managers.

TIM Group’s excellence in technology and financial analytics complements Mergermarket Group’s strength in providing market-critical intelligence. Mergermarket Group is attracted by the prospect of further cementing its position as a key source of market-critical information to the buy-side.

TIM has built a unique market position as a trusted distributor of equities trade ideas and investment recommendations, and is very well placed to expand the business beyond its current network of users. TIM Group users are adjacent to those currently serviced by Mergermarket Group, so the acquisition paves the way for commercial and content-related synergies.

About TIM Group

Founded in 2002, TIM Group (www.timgroup.com) operates the world’s largest end-to-end trade ideas network (TIM).

With offices in London, New York and Hong Kong, we work with 3,000 equity sell-side contributors at 300 investment banks and brokerages.

TIM Group’s mission is to help investors make market-beating returns, while simultaneously helping originators of market insight earn incremental revenue.