CHICAGO (HedgeWorld.com)--With Capital Resource Advisor's purchase of BARRA RogersCasey, two of the founding firms in the investment consulting industry are now one.
On Wednesday, CRA closed the deal, paying Barra $14 million in cash in exchange for all of the stock of BARRA RogersCasey. This purchase includes Barra's institutional consulting business through BARRA RogersCasey and Barra Strategic Consulting Group, which consults to asset managers.
The new entity, CRA RogersCasey, will still capitalize on the strengths of both firms in the hedge fund arena, said Kevin Greene, chairman and chief executive officer of Capital Resource Holdings, the CRA's holding company.
"We are now a much stronger, deeper competitor," Mr. Greene added.
Combined, the firms now serve 250 clients representing more than $800 billion in assets under management. BARRA RogersCasey brought about 100 clients with a little under $400 billion in assets into the fold.
CRA may have stronger alternative investment consulting capabilities given that two years ago the firm purchased Boston-based Wellesley Group. Mark Baker, formerly of Wellesley leads the alternatives effort at CRA along with Joe Reilly. Carla Haugen still leads the effort at BARRA.
At Barra Strategic Consulting Group in Darien, Conn., hedge funds have been a focus too. The group released a report last year titled, "Fund of Hedge Funds--Rethinking Resource Requirements," which is based on over 70 interviews conducted in the spring of 2001.
The report, written by Barra's Peter Fisher and Chris Acito, said growth would pressure hedge funds of funds providers to increase resources for manager selection and risk management, leading to the evolution of a new business model. (Previous HedgeWorld Story)
"This is the conclusion of a two-year process of sharpening our strategic focus by exiting all non-strategic venture businesses," Kamal Duggirala, chief executive officer of Barra, said in a statement.
Barra still hangs on to its risk management technology business, an area it has always been well known for even before it acquired RogersCasey in 1996.
Both firms have been recognized as founders of the U.S. investment consulting industry. RogersCasey was founded in 1976 by Stephen Rogers and John Casey as Rogers, Casey & Associates Inc. The firm was one of the nation's first investment consulting firms specializing in providing advisory services to institutional investors.
The other was CRA, which has also gone through name and ownership changes in its 33- year history as well. It started out as a division of A.G. Becker in 1968 providing investment monitoring to pension funds. The business was sold to SEI Investments, which then sold CRA to Capital Resources Holdings in 1997.