Foremost Credit Rating Agency, Moody’s has said that it had bought a majority stake in Copal Partners, a company that provides research and analysis for banks, hedge funds and private equity firms using analysts in India and other emerging markets.Copal’s 1,250 analysts do equity research, due diligence on mergers and statistical analysis for dozens of big banks and funds, at a fraction of the cost of analysts in New York or London. The company’s revenue has increased at least 20 percent a year since 2006, and is projected to hit $50 million in 2011, Copal executives said on Monday.
Terms of the all-cash deal were not disclosed. Moody’s said it would not affect the company’s 2011 results.
Mark Almeida, the president of Moody’s Analytics, called the deal a “logical extension” for Moody’s Analytics, which has more than half of its 1,800 employees outside the United States. Moody’s Analytics is in the business of providing research and data and software, he said, while Copal provides people to augment the staff of banks and other companies.
Outsourcing companies in India have taken on more sophisticated tasks in recent years, as they try to increase revenues and as companies in the developed world cut costs. Indian companies and analysts have expanded into the legal industry, where they provide document review, the pharmaceutical industry, where they do research, and in financial services.
The last few years of instability in the financial services industry have brought Copal new businesses and clients that may not have considered outsourcing in the past, said Rishi Khosla, the chief executive of Copal. “Most banks today view this as part of the operating model, and for the larger banks it’s a question of how much of this they want to do,” not whether they want to do it, he said.
In a related development, Moody’s Corporation will make its introductory foray into the Nigerian marketplace in a breakfast session on Nigeria’s corporate rating followed by a session on Nigeria’s sovereign rating on December 1, 2011. Moody's Corporation is the parent company of Moody's Investors Service, which provides credit ratings and research covering debt instruments and securities, and Moody's Analytics, which offers leading-edge software, advisory services and research for credit and economic analysis and financial risk management.
The sessions will look at imperatives of the sovereign rating of the Nigerian economy in light of global economic crisis and its effect on sovereign ratings. The event will look deeply at how corporations can benefit from ratings and maintain strong credibility and relevance through rating institutions like Moody’s. The event, a collaboration of Moody’s, AME&T Group S.A and Futureview Financial Services Ltd. will feature the Hon. Minister of Finance & Economic Affairs Dr. Ngozi Okonjo-Iweala and the Hon. Minister of Trade & Investment Dr. Olusegun Aganga,as special guests along with Michael Korwin, Senior Vice President of Moody’s as the Keynote Presenter and other Moody’s Analysts. The team will then proceed to Abuja on December 1 for a government only session that will discuss Nigeria’s sovereign rating.
Moody's currently rates the U.S. at a top-notch triple-A, though its outlook on the rating is negative. Moody’s affirmed the US’ triple-A rating after the US Congress reached a last-minute deal in early August to raise the debt ceiling, saying it would be a "positive rating factor " if the Joint Select Committee on Deficit Reduction agrees on a path to trim the US deficit by $1.5 trillion over 10 years. However, a rating downgrade wouldn't be triggered automatically if the group can't reach a consensus. "As $1.2 trillion in further deficit reduction has already been legislated through automatic spending caps if no agreement is reached.”
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