LDC will support the growth Capital Economics, one of the world’s foremost independent macro-economic research companies, with a minority investment that will help accelerate the firm's international growth and strengthen product offerings.Capital Economics’ output spans global, regional and country research, including coverage of 56 emerging markets, and specialised analysis of financial markets, commodities and the consumer and property sectors, delivered across 23 different subscription services. In addition, it undertakes commissioned research projects.
Capital Economics, led by Roger Bootle, was established in 1999, and is headquartered in London. It currently has almost 100 employees, of whom about a half are economists working across offices in London, Toronto and Singapore.
As well as the financial aspect, this transaction enables Capital Economics to widen ownership of the shares amongst its staff and to strengthen the management team. After the transaction, the management team will continue to be led by Roger Bootle, who will be Executive Chairman.
Existing Capital Economics directors Jonathan Loynes and Julian Jessop will sit on the new board, along with Mark Harris as Finance Director. Peter Rigby (formerly Chief Executive of Informa) will join the company as a Non-executive Director and Chris Hurley, CEO, LDC will also join the board.
As the largest macro-economic consultancy in Europe, Capital Economics has established a reputation for independent, rigorous and insightful research, winning the prestigious Wolfson Economics Prize in 2012. The company now delivers research to about 1,300 institutional clients in 70 countries. Over 70% of its sales are outside the UK, with the United States being the largest single market. Capital Economics has developed a distinguished blue-chip client base across banking, finance, asset management, industry, commerce, government and the property sector.
Capital Economics’ reputation is based on the excellence of its highly qualified and experienced economists, the succinctness, timeliness and quality of its research products, and the independence of its judgements. All of these will continue after LDC’s investment.
The company will now press ahead with the development of new products, including dedicated services on India and each of the major commodity types. It will also examine the possibility of opening further overseas offices.
The demand for independent research is forecast to increase substantially, at the expense of so-called “free” sell-side research. Research users are placing greater importance on impartiality, while investment banks are de-emphasising their research operations to cut costs and lessen conflicts of interest.
Roger Bootle, Chairman of Capital Economics, commented:“This is a very exciting development for our business, with LDC’s investment providing a strong platform to enhance our services and extend our geographic reach. Capital Economics will continue to build on its existing international reputation, based on high quality research products, well written, delivered in a timely way and embodying judgements independently formed and clearly expressed – even if they are profoundly at odds with the prevailing consensus.”
The shareholders of Capital Economics were advised by Quayle Munro and Squire Patton Boggs.