Governance

Paul Hodgson: Is a new ISS really “on the rise”?

What is the meaning of a very public countdown?

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With the auction being conducted by index firm MSCI for its Institutional Shareholder Services (ISS) proxy voting arm apparently nearing its final stages, independent analyst Paul Hodgson assesses the state of play…

The site New ISS Governance has been running a while now, displaying a countdown clock.
No one really knows what it means. The site says: “A new ISS is on the rise. Business as usual.” It might be a countdown to the announcement of ISS’s new owners, though the time remaining seems to change whenever you refresh the page.
If so, we seem to be moving farther away from an announcement rather than moving closer to one. With proxy season lining up, this level of uncertainty is odd.
I wrote a few weeks ago that a buyer, according to those familiar with the process, was due to be announced at the end of February, yet here we are more than a week into March, and no announcement has been made.
According to insiders, five or six private equity firms were lined up to make a bid during February. While no announcement has been made, a person associated with the bidding process said that there was a whisper that there is a winner.However, speculation continues. One story is that Robert CS (Bobby) Monks, son of the founder Robert AG Monks, who sold ISS to RiskMetrics prior to RiskMetrics’ acquisition by MSCI, may have been one of the bidders.
An insider at GMI Ratings (which is a successor company to The Corporate Library, also founded by Robert AG Monks) noted that if a Bobby Monks bid were successful he could possibly absorb GMI too. GMI has taken on a number of senior ISS staff recently, including CEO Dan Concannon.
Then, yesterday, the Wall Street Journal, citing unnamed sources, reported that Insight Venture Partners, a private equity firm, appeared to have won the bidding process. Insight specialises in software, Internet, and data-services companies and has raised more than $7.6bn since it was founded in 1995. It has backed the likes of Twitter and Tumblr. The Journal said the terms of the deal weren’t known and Insight didn’t respond to a request for comment from RI.
But the market does not believe that this is definite. The countdown continues.

Paul Hodgson is an independent governance analyst.