| Type | Private Company |
|---|---|
| Founded | 1998 |
| Headquarters | New York, United States |
| Area served | Worldwide |
| Key people | Mark Gerson (Co-Founder and Chairman); Alexander Saint-Amand, (CEO); Thomas D. Lehrman (Co-Founder and Director) |
| Industry | Financial services |
| Services | Primary research; Experts network |
Gerson Lehrman Group (GLG), founded in 1998 and headquartered in New York City, operates an expert network platform of more than 300,000[1] subject matter experts who provide independent consulting services to companies around the world.
GLG primarily serves the investment community improving their decision-making process by putting clients in touch with relevant experts through a variety of consulting methods, including telephone conversations, surveys, written reports and in-person events and meetings. GLG clients also include professional services firms, corporations, and non-profit organizations [2].
GLG Members include consultants, physicians, scientists, engineers, lawyers, market researchers but also senior-level business executives - including former and current corporate C-level/presidents - and also former senior members of governments.
The company divides its experts by field of expertise, focusing on specific industries or disciplines. GLG practice areas include: Accounting and Financial Analysis; Consumer Goods and Services; Energy and Industrials; Financial and Business Services; Healthcare; Legal, Economic and Regulatory Affairs; Real Estate; and Technology, Media and Telecom.
Contents |
Gerson Lehrman Group, once called the "most valuable NYC company no one outside of Wall Street has ever heard of"[3], was founded by Duke University and Yale Law School graduate Thomas Lehrman and fellow Yale Law School graduate Mark Gerson, who had worked at Tiger Management, one of the world's largest hedge funds, that led to a generation of spinoffs, known as Tiger Cubs [4] . GLG , initially funded by a friends and family round [5], was formed as a publishing house to produce industry guidebooks for institutional investors, a business they abandoned a year later when they could find no buyers for their product. The two retooled their business model a year later to offer a matchmaking service (later called expert network) to connect investors with independent consultants. Its services filled a research gap by providing timely, proprietary insights that were increasingly difficult to get from large brokerage firms.
GLG operates a technology-enabled platform for institutions to consult and collaborate with experts in various industries and disciplines around the globe. Clients work with Research Managers who, with the help of a proprietary set of online profiling and compliance tools, identify, find, vet and connect relevant experts with users. Clients can also identify appropriate experts from the network and manage the logistics around the consulting session via a Web-based software tool called the Research Management Platform (RMP). GLG connects clients with relevant experts in a variety of consulting methods, such as:
The company’s approach of connecting people and allowing for ranking of the experience involves a number of elements associated with social networking sites. There are some who consider the GLG model to be part of the evolving social network collaboration trend.[6]
Experts are usually invited by GLG researchers to join the network based on their expertise or association with industry organizations. Experts can also submit their profiles online, including biographical descriptions and other background information and choose their own honorariums. GLG home page states that it has more than 250,000 experts in its network. A competitor, Vista Research, is said to have a network of 90,000.[7]
According to GLG website [8] the company serves asset managers, private equity, investment banks, and venture capital clients as well as consultancies, corporations, law firms, life sciences companies, marketing agencies, nonprofit and public sectors. [9] Some of its best clients include 15 of the leading 20 global investment banks, 9 of the world's leading 10 private equity firms and Fortune 500 clients in virtually all sectors. Goldman Sachs and Och-Ziff Capital Management Group were mentioned to be some of GLG's clients [10]. The Economist recently reported that GLG’s clients spend on average $170,000 a year and that GLG keeps a record of "who talks to whom, about what, down to the minute". [11].
Gerson Lehrman Group claims it facilitates more than 18,000 transactions a month on average[12]. A typical phone consultation with an expert lasts for approximately 45/60 minutes.[13] with the experts, who aren't GLG employees, being typically paid between between $200 and $1,000 per hour [14].
In 2008, according to a report by Integrity Research[15] there were at least 25 expert network providers (such as Coleman Research Group, AlphaSights, CognoLink, DeMatteo Monness, ExpertView, Informed Edge and Public Insight LP)[16] [17] with GLG having about 70% of the market. Estimates of the company’s value range from $875 million to $950 million.[18].A 12-month revenue figure of $220 million was included in a company press release in December 2007 that announced that technology investment firm Silver Lake had made an approximately $200 million investment in GLG.[19] An article published in Financial News in January 2009 reported that the company's revenues for 2008 were $284 million.[20]
Recently GLG has created G+[21], a question-and-answer website, edited and organized by its community of users to compete with Quora[22] and to attract more experts to their platform.
Before joining GLG platform and become able to participate in consultations, all experts are required to complete an interactive tutorial and agree to its Terms and Conditions contract. According to their website [23], among other things, all Council Members need to sign the contract in where they agree to:
Experts without the written consent from their employers may also only participate in a limited number of consultations and online surveys.
GLG has recently won an award for its compliance framework [24]
As the use of alternative research providers within the financial industry has grown, brokerages themselves have been partnering with firms such as GLG.[25]
On September 10, 2008, the company announced a deal with Credit Suisse, whereby analysts from the financial services giant would be able to tap into GLG’s Council Members as part of their research process. About 300 Credit Suisse analysts became members of the GLG expert network.[26] In 2009 it has also announced a partnership with Frost & Sullivan's, making their over 800 market researchers available to consult with GLG clients. [27].
In July 2009, GLG announced that it has partnered with Amba Research, a leading financial services Knowledge Process Outsourcing (KPO) firm that provides equity and credit research [28].
On July 8, 2010, GLG and Bloomberg announced a partnership that enables clients of the Bloomberg Professional platform to access the GLG expert network through the Bloomberg platform. Through the partnership, Bloomberg clients can view the bios of more than 50,000 GLG Members on the Bloomberg terminal, request consultations with experts, and access news commentary, video, webcasts and teleconferences [29].
In October 2011, GLG partnered with and acquired a minority stake in Ushi [30], a the leading China-based business social networking provider, and the largest competitor of Linkedin in the region [31] in order to boasts the GLG's network of more than 25,000 Chinese subject matter experts.
In 2006, GLG worked with U.S. Department of Housing and Urban Development to provides new primary data and analysis trelevant for any other recovery plans in the rebuilding of Louisiana following Hurricane Katrina and Hurricane Rita. [32] [33]. It has been on the news that it has also done some other philantrophy work with smaller charities[34].
In addition to Gerson Lehrman Group's headquarters in New York City, the company operates globally in key cities around the world.[35]
In January 2009, the company opened an office in Dublin, Ireland.[36] In September 2009, Gerson Lehrman Group's acquisition of French expert network TGR Research provided the company with an office in Paris, France.[37]. It was also reported that firms business in Asia grew 90 percent in 2008.[38]
The expert network business model has drawn scrutiny for concerns relating to adherence to disclosure rules and sharing of insider information within the investment industry.[39] During 2005, for example, doctors who served as paid consultants to investment firms as a result of their role in an expert network generated a “fair share of controversy.”[40] GLG was part of a lawsuit filed by Biovail in March 2006, in which Biovail claimed that its shares had been manipulated.[41] In September 2006, GLG announced the creation of a proprietary system that helped identify and manage conflicts, leveraging its experience as a pioneer in its industry to craft risk-reducing rules for expert engagements[42] [43]
In January 2007, it was reported that the company and Vista Research, then a Standard & Poor affiliate, were part of an inquiry by the New York State Attorney General’s office into the consulting practices of investment firm clients.[44] As of December 2007, the Attorney General had taken no action, and the investigation appeared to be dormant.[45]
Althought GLG has not been implicated of any wrongdoing [46] the overall Experts Network industry has caught the eye of the regulators and is since the end of 2010 going through investigations by the American Regulators, after a consultant testified having used Primary Research Global, another expert network, to leak information to traders . [47]
GLG business model has been used as case study at Harvard Business School[48] [49]