RiskMetrics confirms KLD buy-out

RiskMetrics Group, the New York-listed US risk management and corporate governance group, has confirmed a $10m acquisition of Boston-based KLD Research & Analytics, the ESG research house. The planned buyout was first reported in Responsible-Investor.com on October 13. The companies have not disclosed whether the deal will have any impact on staffing. RiskMetrics said the combination of the two firms would deliver increased ESG coverage, including more robust data, expert insights, and user-friendly tools. Knut Kjaer, president of RiskMetrics Group, said: “Our clients have indicated that ESG performance is a critical benchmark of a corporation’s risks and long-term value. KLD’s ESG capabilities, combined with our financial risk and corporate governance experience, will give investors worldwide a more thorough picture of sustainability and risk across geographic and industry boundaries.” The KLD acquisition is RiskMetrics’ second major buyout this year in the ESG (environmental, social and governance) space after it bought Innovest, the SRI research house in February. Last week,Responsible-Investor.com revealed that Matthew Kiernan, co-founder of Innovest who became co-head of the Sustainability Solutions Group at RiskMetrics was leaving the firm just eight months after the buy-out.
RiskMetrics, which was spun out of JP Morgan, the US banking group, in 1998, has been rapidly increasing its presence in the responsible investment field in recent years and in 2007 acquired Institutional Shareholder Services (ISS), the US proxy voting agency, making it the world’s largest proxy voting house. It now has a similar dominant position in terms of size in the ESG research field.
KLD, one of the world’s oldest ESG research houses was founded in 1988, and was led by Peter Kinder, president, and Tim Brennan, chief operating officer. It provides ESG research, compliance screening and indices to 30 of the top 50 institutional money managers.
In October, 2008, KLD signed a deal with FTSE, the London-based index provider, to co-brand KLD’s suite of ESG benchmarks and split the revenues.