FactSet Research Systems
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| FactSet Research Systems | |
|---|---|
 |
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| Type | Public (NYSE: FDS) |
| Founded | 1978 |
| Headquarters | Norwalk, Connecticut, USA |
| No. of locations | 23, in 12 countries |
| Industry | Computer Services |
| Revenue | ▲$475.8 million USD (2007) |
| Operating income | ▲$155.09 million USD (2007) |
| Net income | ▲$109.57 million USD (2007) |
| Total assets | ▲$523.75 million USD (2007) |
| Employees | 1,743 (Nov '07) |
| Website | factset.com |
FactSet Research Systems (NYSE: FDS) is a financial data and software company headquartered in Norwalk, CT. The company provides financial information and analytic software for investment professionals.[1] In 2007, annual sales were $475.8 million.
FactSet offers access to data and analytics to analysts, portfolio managers, and investment bankers at global financial institutions. The company does not offer products for individual investors. FactSet debuted in 2008 as one of FORTUNE's "100 Best Companies to Work For" [2] and has been listed as one of Forbes’ "200 Best Small Companies" for 11 consecutive years.[3]
FactSet's business focuses on technology and client service. In addition to combining several hundred disparate databases, the company develops and refines its software. FactSet provides clients with local, dedicated consultants, 24-hour phone support, and free training.[4]
Some of its competitors include Bloomberg L.P., Thomson Reuters, Calibre Financial Technology and Capital IQ.
Contents |
[edit] Corporate Vision and Mission Statement
FactSet enhances the productivity of the Global Investment Professional by providing superior workflow solutions. We combine distinctive technology, content, and unmatched service to improve decisions in every part of the investment process.[5]
[edit] Products and Services
Products[6]
- FactSet DIRECTIONS[7] is used by buy-side professionals, such as investment managers, hedge funds, and plan sponsors, and incorporates 50+ applications and hundreds of databases to help users analyze companies, portfolios, markets, and economies.
- Portfolio Analytics[8] includes the applications for portfolio attribution, risk management, and quantitative analysis. During the fiscal year ended August 31, 2007, there were over 540 clients representing approximately 4,700 users who subscribed to this service.
- Marquee[9] is the company’s real-time quotes and news application. The combined FactSet Marquee/DIRECTIONS desktop provides users the ability to share portfolio holdings automatically between DIRECTIONS and Marquee.
- IBCentral is used by the sell-side to track a given company as it grows from start-up through acquisition or initial public offering.
FactSet integrates several hundred databases from multiple vendors. The applications include company analysis, multi-company comparisons, industry analysis, company screening, portfolio analysis, predictive risk measurements, alpha testing, portfolio optimization and simulation, real-time news and quotes, and tools to value and analyze fixed income securities and portfolios. FactSet is available via wireless devices and is integrated with Microsoft Office applications.[10]
Proprietary Data Content[11]
- FactSet Aggregates
- FactSet CallStreet Transcripts & Event Data
- FactSet DealMaven
- FactSet Estimates
- FactSet Economics
- FactSet Financial Entities
- FactSet Fixed Income
- FactSet Flashwire News
- FactSet Global Filings
- FactSet Institutional Ownership News
- FactSet IPO
- FactSet LionShares
- FactSet MergerMetrics
- FactSet Mergerstat Global
- FactSet People
- FactSet Private Company
- FactSet Private Equity & Venture Capital
- FactSet Research Connect
- FactSet SharkRepellent
Services
- Consulting: Each firm is assigned a Consultant who becomes familiar with client needs and processes. Clients also have access to Consulting Services phone support. [12]
- Training: FactSet hosts free training seminars in its New York, Boston, Chicago, London, Paris, and Tokyo training centers. Consultants can also arrange personalized training sessions at client offices.[13]
- Security: FactSet maintains physical, electronic, and procedural safeguards to address security and business continuity risks.
- Multiple Access Points: Every FactSet client receives access on an office PC, laptop, home computer, and wireless device.
[edit] History
FactSet was founded by Howard Wille and Charles Snyder in 1978. Their partnership began in 1977 when the two were working on Wall Street at Faulkner, Dawkins and Sullivan, a pioneer of institutional research.[14]
As computers became more prominent at the end of the 1970s, Wille and Snyder knew that the industry was changing. When Shearson purchased Faulkner, Dawkins and Sullivan and the company started to expand, Wille and Snyder decided to set out on their own and test their idea for a company that could deliver computer-based financial information. At the time, companies had to purchase raw data directly from a vendor such as Compustat, then hire programmers to make the data user-friendly. Wille and Snyder’s vision would offer useable data directly to the client.
Originally, all data was delivered to clients on paper, often by bike messenger. The first and namesake product was a program called "Company FactSet," which produced a four-page company analysis report using the Value Line database. Today, FactSet users connect to FactSet’s private network via WAN, Internet, and wireless devices.
In the early 1980s, FactSet employees numbered fewer than 10. In 1981, Snyder found a way to download data from the FactSet computer into Visicalc, meaning that clients could retrieve data from a database directly into a spreadsheet. For the first time, several steps in the process were eliminated, making the data download process dramatically quicker.
In 1984, FactSet added limited screening capabilities, which were expanded in 1988 with the introduction of Universal Screening, which allowed users to stipulate their own screening criteria. Another important development during the 1980s was the 1989 release of the company's Private Database Service. Users could now store proprietary data and integrate it with their own information to perform custom analysis.[15]
Current CEO Philip A. Hadley joined the company as a Consultant in 1985. A year later, current President Michael DiChristina joined as a Software Engineer.
FactSet for Windows was released in 1990. That same year, company headquarters moved from New York City to Greenwich, CT.
A London office opened in 1993, the first in Europe. The first Asia-Pacific office opened in Tokyo in 1995. Today the company has 23 locations in 11 countries and nearly 1,700 employees.
By the end of 1995 FactSet had fewer than 400 customers, but they included 84 of the United States' top investment managers. The company also changed its name in June 1995, becoming FactSet Research Systems Inc. in preparation for becoming a public company. The company began trading on the New York Stock Exchange in 1996 under the symbol FDS.[16]
In 1996 the company released Portfolio Management Workstation, which was followed a year later by the Economic Analysis and Company Explorer applications.
The product became easier to use in 1998 with the release of the DIRECTIONS interface and the addition of Online Assistant, a web-based help and reference tool. FactSet introduced 24-hour live telephone support in 1999.
Wille retired as CEO and chairman in May 2000, Snyder stepped in as CEO on an interim basis, serving until September of that year, when Hadley was named the new CEO and chairman.
New products in the early 2000s included a portfolio returns product, SPAR (Style, Performance and Risk), that allowed portfolio managers to analyze the risks and performance of their own funds as well as compare them with peer funds; the Data Central application, which allowed subscribers to create and save their own time-series databases; and Marquee, which combined real-time news and stock quotes with security-level analysis.[17] In 2004, the company's sell-side platform, IBCentral, was released.
Also in 2004, the company relocated headquarters and consolidated its three Connecticut offices to Norwalk, CT. Sales topped the $200 million mark for the first time in 2002 and are likely to top $500 million in 2008.
[edit] Financials
For 2007, FactSet’s 29th year of operation, the company recorded its 27th consecutive year of revenue growth.[18]
In 2007 the organic revenue growth rate rose to 22% and net income grew 32%.[19] In addition, 2007 saw a record number of financial institutions subscribing to FactSet products.[20]
Income Statement (all numbers in thousands)[21]
| PERIOD ENDING | 31-Aug-07 | 31-Aug-06 | 31-Aug-05 |
|---|---|---|---|
| Total Revenue | 475,801 | 387,350 | 312,644 |
| Net Income | 109,567 | 82,916 | 71,765 |
[edit] Investor Concerns
Fixed Income Products
Investors describe FactSet’s current capabilities in fixed income as “modest.” [22] With the 2005 acquisition of Derivative Solutions, FactSet began to address the enormous worldwide fixed income market, but product offerings still lag behind its equity analysis offerings. Currently FactSet is also weaker on other types of financial instruments, such as currencies, commodities, and derivatives.
Available Data
The majority of data provided by FactSet is received from third-party vendors. The company receives data from providers such as Barra, Dow Jones, Russell, and Lipper. In addition, several data providers, including Thomson/Reuters and Standard and Poor’s, offer products and services that directly compete with those offered by FactSet.
Since contractual relationships with third-party vendors can be terminated with one year’s notice, the company tries to maintain relationships with at least two vendors for each type of data. Recently the company has attempted to maintain or increase its available content by building its own databases or by acquiring content providers. Since 2001, FactSet has made eight acquisitions, five of which have been content providers. [23]
[edit] Management
- Philip A. Hadley, Chairman of the Board, Chief Executive Officer[24]
- Michael F. DiChristina, President, Chief Operating Officer, Director
- Charles J. Snyder, Vice Chairman of the Board
- Peter G. Walsh, Chief Financial Officer, Senior Vice President, Treasurer
- Michael D. Frankenfield, Senior Vice President, Director of Investment Management Products & Services
- Kieran M. Kennedy, Senior Vice President and Director of Investment Banking and Brokerage Services Management
[edit] Recruiting
FactSet added 23% headcount growth in fiscal 2007. Most new employees are recruited for the Consulting and Engineering departments, with many coming directly from college. The company’s employee retention rate has historically averaged 90%.[25]
[edit] References
- ^ Screening for Winners by Rex Moore, The Motley Fool, December 8, 2003.
- ^ FORTUNE's 100 Best Companies to Work For 2008
- ^ Forbes’ 200 Best Small Companies
- ^ Yahoo FactSet Profile
- ^ FactSet's homepage
- ^ FactSet Products on Reuters
- ^ Software and Datafeeds: Bentley
- ^ The Best of Both Worlds by Wall Street & Technology
- ^ Bob's Guide on Marquee
- ^ MSN Company Report
- ^ FactSet Data
- ^ Best Customer Service - FactSet
- ^ It's All Adding Up for FactSet
- ^ Company History
- ^ Company History
- ^ 1996 SEC Filing
- ^ Company History
- ^ 2007 Annual Report
- ^ FactSet Blows Out Q4 Estimates
- ^ New Subscriptions Help FactSet Beat the Street
- ^ Google Finance
- ^ Plenty of Room for FactSet by Stephen D. Simpson, Motley Fool
- ^ [ http://www.businessweek.com/investor/content/may2006/pi20060523_172477.htm It’s All Adding Up for FactSet] by Zaineb Bokhari, BusinessWeek
- ^ FactSet Management
- ^ F4Q Conference Call Transcript
