Two distributors of trade ideas and research, Boston-based First Coverage and youDevise, headquartered in London, are merging to form a “global alpha capture network” that will allow institutional investors and brokers to share trade recommendations.
Both companies allow brokers to submit targeted trade ideas to their buy-side clients electronically, allowing investors to filter noise and track the performance of the ideas they implement. The trade ideas distributed include both long- and short-term, client-specific equity trading recommendations.
The combined company, which will operate under the youDevise name, will serve more than 150 institutional investors – comprising hedge funds, traditional money managers and specialist alpha capture funds – and over 560 sell-side firms.
The two platforms collectively transmit a total of over 2,000 ideas a day, up 60% from a year ago, that are based on stocks primarily traded in the US, UK, Europe and Asia.
youDevise and First Coverage launched their services in 2005 and 2006 respectively. The integration of the two platforms is expected to be completed later this year, with the best features of First Coverage becoming part of youDevise's Trade Idea Monitor. Until then, users will have continuous access to their service of choice and will be updated when new enhancements are released.
“The merger makes tremendous sense for our clients who can use the combined network to access knowledgeable counterparts on any scale of stock, in any sector, anywhere in the world, while providing brokers with new ways to monetise their intellectual property,” said Colin Berthoud, founding partner of youDevise.
“Our shared ”customer first' commitment, to help the buy- and sell-side create value from trade ideas, will be significantly enhanced,” added Roland Beaulieu, CEO of First Coverage. “Given the alignment of our visions, technologies and strategies, the combination of youDevise and First Coverage creates the premier alpha capture platform in the world.”
A syndicate of venture capital firms – Commonwealth Capital Ventures of Boston, GrandBanks Capital of Boston, and JLA Ventures of Toronto – that were initial backers of First Coverage have also invested in the merged entity.
The combined company will be led by Berthoud and fellow youDevise founding partner Rich Koppel. First Coverage's Roland Beaulieu and Commonwealth Capital Ventures' Jeff Hurst have joined the youDevise board of directors.