RiskMetrics Group to acquire Innovest

Two of the world’s leading providers of environmental, social and governance (ESG) research and analysis are joining forces. RiskMetrics Group has announced plans to acquire Innovest Strategic Value Advisors. Both firms are headquartered in New York, though Innovest also has a Toronto office.

The acquisition of Innovest and its team of experts, led by co-founders Dr. Matthew Kiernan and Hewson Baltzell, enlarges RiskMetrics footprint in the environmental, social and governance research space at a time when the financial community’s interests in sustainability are growing, the two companies said in a joint news release issued on Thursday.

"A myriad of long-term sustainability factors, particularly around climate change, are playing an increasingly important role in the way funds invest and view their portfolio risk," said Ethan Berman, chief executive officer of RiskMetrics Group. "Innovest is one of the few firms that has successfully taken a quantitative approach to assessing ESG issues, thereby helping investors view what are typically intangible, compliance-oriented issues through a clearer financial lens."

RiskMetrics provides ESG research, data feeds and portfolio screening tools to global institutions that have a need to comply with clients’ investment mandates. With the acquisition of Innovest, clients will have access to an ESG analyst team of more than 50 research professionals.

"It would be an understatement to say that today’s turbulent market environment is placing an unprecedented premium on understanding the entire spectrum of investment risks – both traditional and non-traditional,” said Dr. Matthew Kiernan, founder and chief executive of Innovest. "By combining Innovest’s ESG research with RiskMetrics leading capabilities in risk management and corporate governance, we can help investors make more-informed decisions."

Innovest had $7.0 million of revenues in 2008 and is expected to contribute in excess of $2 million of adjusted EBITDA to RiskMetrics. The transaction is expected to close on March 2, 2009, pending the usual regulatory approvals.