Good morning, everyone. Thank you so much for joining us at the New York Stock Exchange today as well a very good morning to everybody listening to us around the world on our live webcast. My name is Rima Hyder. I'm the Vice President of Investor Relations at FactSet. And on behalf of our management team, I am so excited to welcome you today to our Investor Day 2018.
For nearly 40 years, Faxit has been the global investment the trusted partner to the global investment community. And today, we plan to show you just why we win and why we provide some of the best solutions for our clients. Phil Snow, our CEO, is going to kick off today's presentations followed by many of the FactSet leaders who you'll hear from. For those of you in the ballroom, I know you've already spent some time talking to our wonderful product experts. Please go and view the demonstrations either during the break, the 2 coffee breaks that we have or during our lunchtime.
I think it will allow you to understand the company
a lot better. We do have one combined Q and A session
a lot better. We do have one combined Q and A session today at the end of all our presentations. And at that time, I'll come back on stage and moderate the Q and A panel. The slides that you see up will be made available to you after the event today, and they will be on our website. Before we begin, this is my most favorite part, the most important part, the legal slide.
So I remind you that some of the statements that we're going to make today may be considered forward looking and they have non GAAP measures. This information is subject to risk and uncertainty as detailed in our recent SEC filings. So please take a minute to review the safe harbor slide behind me. And with that, I'd like to welcome to the stage the Chief Executive Officer of FactSet, Phil
Snow.
Good morning, everyone, and thank you for coming today. I'm going to kick things off by talking about 3 things, who we are as a company, the great opportunity that exists for FactSet in the marketplace and how we're going to win. At our heart, FactSet is a company of problem solvers. The reason we all get out of bed every morning with a big smile on our face is to solve problems for our clients. It's something we've been doing for 40 years.
And it's a real piece of our values as a company. We're extremely client centric. We all roll up our sleeves to get the job done. And we have a very team based approach in terms of how we go after the market and how we work with each other internally. FactSet is a much larger company than we were even 5 years ago.
We have a global footprint now of over 60 offices. We have 9,000 employees. We have 5,000 clients. We have almost 90,000 users. And this is something we can really leverage as a company now, particularly given the culture that we have.
So our clients now are looking for us as a company to solve even bigger problems for them than they had in the past. And we think the community that we've built of clients and the great culture we have as a company is something we can leverage across our global footprint. This
one of
the things that I set out to do as CEO a few years ago was really push down decision making into the organization through different groups and through the globe. We still have a long way to go doing that. But I think by doing that, we'll be able to grow our revenues at a faster click globally by delegating responsibility more to the different regions and we're able to bring products to market at a faster clip for the needs of the different markets that are out there for our clients. I visit probably 20 offices a year as CEO to talk to employees and to talk to clients. And I'm always thrilled by the consistency in terms of the culture that I see in our different offices and the positive feedback that we get from our clients throughout the globe.
So let's talk about the opportunity. I think it's pretty well accepted that since the financial crisis, our market has been growing in low single digits. And during that period, FactSet has been taking market share. We've been growing in mid to high single digits over the last 10 years, and we're really proud of the job that we've done operating in I think what all of you would recognize is a pretty tough environment. By most estimations, the size of our market is between $25,000,000,000 $30,000,000,000 And right now, I couldn't be more excited by the amount of product that we have on the shelf and the rate at which new product is coming to market.
I think it's the best product lineup I've seen in my career in terms of what we can offer to clients and how we can stitch it together. So FactSet as a company cannot address the entire $28,500,000,000 market today. We don't have all of the capabilities of all our competitors. But the amount of total addressable market within this $28,500,000,000 is increasing at a rapid pace. So I would estimate that we could address probably half of that today.
And the other thing that I think is important to recognize is that a lot of our clients spend a tremendous amount of money building solutions themselves. And FactSet as a technology company is able to, I think, allow clients to outsource more of what traditionally they've built themselves. So I think this $28,500,000,000 may be a little understated versus some of the themes that we see going on in the marketplace. So how is FactSet going to win? What is our advantage?
We have always stood as a company on 4 pillars: content, analytics, technology and service. FactSet started as a content company integrating third party content into mainframes. We then pivoted to uploading client content in the form of portfolios and other types of data. And then many of you that have covered us for a long time have seen us become a content company ourselves in terms of collecting our own content. And today, what you're going to hear about from Rich Newman and Lauren Klein is the next generation of content integration on the FactSet platform.
For analytics, 20 years ago, I was selling FactSet in Los Angeles, That was my territory. And I would go to a client. We would set off a 2 factor Brinson equity only monthly attribution before lunch. We would go have lunch with a client come back and the attribution was done. Things have moved tremendously forward since then.
We now have a multi asset class performance and risk product on our system that is world class. We've taken a lot of market share in this space. It continues to be one of the biggest opportunities that we see for our company. And Rob Roby, who leads our analytics business, is going to talk to you about that today. Over that period, you've seen us integrate best in class risk models on FactSet from 3rd parties, the same way that we did for content.
And we've begun to build our own risk models now. A lot of you have heard of MAC, our multi asset class risk model. But since the acquisition of Vysam, which had Cognity as part of it, we've begun to take that to the next level in terms of what we can offer in terms of our own risk models to the market. FactSet has always been a great technology company. We started with screening and downloading.
And today, Gene Fernandez, who joined us about 4 or 5 months ago, is going to talk about the next generation of technology at FactSet, how technology can solve new problems for our clients in interesting ways. If I was to summarize, over the last 7 years, we've invested in something we call next gen, which is the re architecture of FactSet's platform. We've made the big investments to move from an old legacy mainframe structure to a more distributed environment. And we're really in the first few innings now of being able to monetize that investment. And the way that we're doing it is really opening up our platform to our clients.
So we now have ways of introducing value, not just through the workstation and through data feeds, but in lots of interesting ways. And Gene is going to talk about that. I think what he's also going to talk about is what is the workstation of the future look like for our industry. Our clients are looking to have more elegant workflows as they look to be more efficient. And I think the FactSet workstation, some of our competitors' workstations, what is that going to look like 3 to 5 years from now?
That's something that we're giving a lot of thought to. And services, FactSet has always been a great services company. Those of you have that have used our product over the years, I know many of you have, understand how good the FactSet consultants are and the FactSet service model. It is a real differentiator for us as a company. And John Wiseman, who leads sales for us as part of his presentation, will talk to you about what the next generation of faxed services looks like in the marketplace.
So let me talk about workflows for a little bit. A lot of you have heard us talk about FactSet moving from being a workstation to a workflow company or a solutions company. And what we've done internally is really aligned ourselves around these areas from a product standpoint. So we're going out now with strategists that are focused in these areas and we've aligned our development and technology teams around these areas of our business, so that we can bring products to market faster and we can make better decisions about what's the next thing we want to develop for different markets. And how we're going to win in my mind is in 3 ways.
One is by completing and filling out what we call the portfolio lifecycle. So the portfolio lifecycle, the way that we define it is taking the research workflow within our clients, whether that's fundamental credit or quant, tying it to portfolio management and trading through to risk and performance through to client reporting. That's what we
Ladies and gentlemen, please welcome to the stage, Rima Hyder.
Good morning, everyone. Thank you so much for joining us at the New York Stock Exchange today as well a very good morning to everybody listening to us around the world on our live webcast. My name is Rima Hyder. I'm the Vice President of Investor Relations at FactSet. And on behalf of our management team, I am so excited to welcome you today to our Investor Day 2018.
For nearly 40 years, FactSet has been the global investment the trusted partner to the global investment community. And today, we plan to show you just why we win and why we provide some of the best solutions for our clients. Phil Snow, our CEO, is going to kick off today's presentations followed by many of the FactSet leaders who you'll hear from. For those of you in the ballroom, I know you've already spent some time talking to our wonderful product experts. Please go and view the demonstrations either during the break, the 2 coffee breaks that we have or during our lunchtime.
I think it will allow you to understand the company a lot better. We do have one combined Q and A session a lot better. We do have one combined Q and A session today at the end of all our presentations. And at that time, I'll come back on stage and moderate the Q and A panel. The slides that you see up will be made available to you after the event today, and they will be on our website.
Before we begin, this is my most favorite part, the most important part, the legal slide. So I remind you that some of the statements that we're going to make today may be considered forward looking and they have non GAAP measures. This information is subject to risk and uncertainty as detailed in our recent SEC filings. So please take a minute to review the safe harbor slide behind me. And with that, I'd like to welcome to the stage the Chief Executive Officer of FactSet, Phil Snow.
Good morning, everyone, and thank you for coming today. I'm going to kick things off by talking about 3 things, who we are as a company, the great opportunity that exists for FactSet in the marketplace, and how we're going to win. At our heart, FactSet is a company of problem solvers. The reason we all get out of bed every morning with a big smile on our face is to solve problems for our clients. It's something we've been doing for 40 years.
And it's a real piece of our values as a company. We're extremely client centric. We all roll up our sleeves to get the job done. And we have a very team based approach in terms of how we go after the market and how we work with each other internally. FactSet is a much larger company than we were even 5 years ago.
We have a global footprint now of over 60 offices. We have 9,000 employees. We have 5,000 clients. We have almost 90,000 users. And this is something we can really leverage as a company now, particularly given the culture that we have.
So our clients now are looking for us as a company when we talk about the portfolio lifecycle. And John Adam, who leads our Portfolio Management and Trading business, he's going to talk to you today about all of the advances that we have in integrating Portware and Simba into the FactSet platform to develop new capabilities for the front office. And for me, that's one of the key things that I think is really going to open up more opportunity at our largest clients and more opportunity for us in the front office. What I don't want to get lost today is the importance of the FactSet workstation and the FactSet web product. We have 90,000 users of our product.
We estimate there's 1,000,000 screens out there for us to capture. You're going to hear about some of the new innovative things we're doing that are driving growth. But that footprint we have of the FactSet workstation, which we continue to invest in, is very important. And we're placing a lot of emphasis on making sure we're defining the next generation of that and we're integrating more and more content into that area. The second way we're going to win is by being an open platform.
So FactSet has always been flexible. We've provided custom work flows for our clients. And by being open and flexible, we think that's a real differentiator versus our competitors. We're not a closed system. We're going to be focused on delivering value to our clients in the way that they want to consume it.
So it could be a workstation.
It could be our web product. It could be an API, it could be
a data feed, it could be with us working with a third party on a custom solution for a client. But we're really agnostic to how we deliver value to the clients, and we do think that also is a differentiator. The third way that we're going to win is with content. Content really is king. You need content in our industry to make good decisions and to be efficient.
And today, you're going to hear about the next generation of content on FactSet. We have built up a great community of users of our product. We have the best integrated set of content in the marketplace. We think we can really leverage the ecosystem and the community that we've built to drive revenue and drive growth within our company. Many of you have waited 10 years for more granularity and data around these areas.
In the grand finale, Maurizio will be talking about some of these areas and providing you some of the detail that you've been waiting for. So I think a few hours is not long to wait relative to the decade that many of you have waited for that. And of course, FactSet has always been committed to returning value to our shareholders. Over the last 5 years, we've returned almost $2,000,000,000 in dividends and share repurchases to the investment community. And FactSet really is a great investment for long term investors.
We've been one of the most steady and consistent performers in terms of delivering earnings and revenue growth to the market since we've been a public company. There are very few companies that have done quarter over quarter over quarter like FactSet has. We have a great product. We have great service. These are award winning products and an award winning service model that really believe that we really believe gives us a differentiating advantage in a tough market, but we do think that versus our competitors, we're the most agile and nimble company within our space and the one that can really execute on the opportunity that's out there.
And last but not least, we have a great management team. So today, you're going to hear from a combination of FactSet Veterans. About half the people that you'll hear from today, like myself, sat on the FactSet helped us, supported clients, sold our product, really understand what our clients do every day and care deeply about solving problems for clients and our relationships with them. You're also going to hear from some leaders that joined us through acquisitions. Many of the acquisitions we've done have been tuck in acquisitions.
They've been strategic. And we've been fortunate enough to retain a lot of the talent from those acquisitions. And lastly, you're going to hear from Gene Fernandez, who just joined us recently from the and we really thank you for coming today. And I will see you and we really thank you for coming today. And I will see you later for Q and A.
So I'm going to now hand it off to Jean Fernandez who's going to talk to you about technology. Thank you.
Good morning, everyone. So I'm celebrating my 5th month here. And what I thought I would do is give you a little bit about my background, what brought me to FactSet and some of the focus areas and opportunities that I think we have. So at my core, I'm an engineer and I'm still very hands on. So over the summer to try to inspire my son to pursuing technology, he and I wrote a distributed trading server that focuses on options and is completely automated end to end.
So together, we wanted to go on a journey of learning some new languages, new techniques and new platforms. Over the last 20 years, I spent my time on a number of different firms. I was at Merrill Lynch, Credit Suisse and most recently JP Morgan. And in that time, I did a lot. I headed up Investment Banking Technology over at Merrill Lynch, worked with BuySides and prime services at Credit Suisse and at JPMorgan did a bunch of things.
Built the client facing platforms for the firm for the institutional side, so JPMorgan markets. And most recently, over the last 3 years, headed up a group called Emerging Technology. And this was a group of engineers kind of formed to look at those technologies that we thought could inform the future business models for JPMorgan. So during my time, I think I've run into FactSet a couple of times. Probably the first time was 17 years ago.
So I've been a fairly big client to not only FactSet, but all the competitors in the space. And because these were clients of scale, had the unique opportunity to deal with these firms top to bottom and very broad exposure to products and their capabilities and engineering. And the thing that always resonated about FactSet is their client service. So they were willing to tailor their products to what the client needs were. So it didn't feel like a product push.
It felt like a solution for clients. And during that time, over the last 17 years, what was interesting is FactSet reinvented itself a couple of times. And the current state of the environment, the market, I think, is requiring clients to now change. So I think the industry is now at a new inflection point. I think there's currently gaps in product offerings and there's new pressures.
So if I think about the regulatory environment, if I think about the cost of security, the cost pressure on both sell side and buy side has gone up dramatically. And with the change in regulatory environment, the transparency has increased such that there's now top line pressure for our clients. And so clients are in this feverish race to massively automate their infrastructures and look at how do we do trading, how do we do sales, how do we do all core business processes through technology. And so potentially, the client of the future for FactSet and for its competitors are going to be sometimes humans, sometimes machines. And what's interesting and exciting about that is that the machines can consume data 100 times, sometimes 1000 times as much as humans can.
And so there's an opportunity for actually the need for data, the need for analytics to go up. And the opportunity that we have is to build a platform that can support that and that can respond to the clients of the future. Many of the competitors, their entire business is architected to a human endpoint. And FactSet is open to supplying both. And that's what's brought me here is that there's this inflection point and we have the startup mentality, but with sufficient infrastructure and scale to actually deliver.
And that's where FactSet, I think, is very uniquely positioned. The sell side and buy side is going through this transformation, and we can support that transformation. And I know having been a client that there are very specific gaps in offerings. And FactSet is kind of uniquely positioned to fill those gaps. As I think about emerging technology, we looked at a couple of very relevant areas.
And so we started out with blockchain technology. And that technology is potentially going to be to transactions what the Internet was to information. And so there's a tremendous opportunity. And there's an opportunity for us to leverage that to deliver a tremendous opportunity. And there's an opportunity for us to leverage that to deliver services in a unique way.
Cognitive Computing, artificial intelligence is another very interesting technology. And there's so much hype, big companies, small companies that are trying to deliver product. And while I was at JPMorgan, we looked at 14,000 different startups, many of which had some cognitive angle. And what we found is that many of these companies, while they had good technology, they struggled to train their machines because they didn't have the data. At FactSet, we can come at it from a different direction.
We have the data. We can overlay the technology. And we can deliver a product that doesn't yet exist. At JPMorgan, we also looked at the public cloud and what we could do with the public cloud. Could we run the bank on the public cloud?
And there's an opportunity there for us to engage clients in a way that hasn't been done before, almost giving us infinite scale regardless of where clients are and workflows they're doing. So my focus areas are threefold. So first, we have some infrastructure, legacy infrastructure that we're going to aggressively upgrade this year. So by the end of this year, NextGen, which is a project that has is looking to eliminate our centralized infrastructure and make it more of a distributed infrastructure will be code complete by year end. Next year, we're looking to have all clients migrated to new platforms.
So effectively, we'll be out of this legacy infrastructure, which will give us an enabling platform to deliver some of these new products. Developer efficiency, I think we've got an opportunity there to automate a lot of what developers do today and give us capacity in our development group without changing the cost profile. So that's a very exciting space. And then finally, and this is what's near and dear to my heart, is using these emerging technologies to create products that don't exist today, that are going to be the drivers of this industry in the future. And as a client, we've envisioned a lot of these products.
We've tried to build some of them ourselves. But FactSet, with its data, with its analytics and engineering capacity, is kind of uniquely positioned to drive this. So expect over the next, call it, 12 to 18 months to see a lot of updates in this space and how these products are taking form. So this is what's brought me to FactSet. This is why I'm excited about the investment in FactSet, and I look forward to the journey.
So some of what you're going to hear today is Rob Roby start to talk about analytics and some of these product areas. And you'll also hear for Richard Newman, who's also going to talk about a new approach with Open FactSet. Our next speaker is going to be John Adam.
Thanks, Jim.
Good morning, everyone. Thanks for joining us today. My name is John Adam. I lead the Portfolio Management and Trading business for FactSet. And I'm really excited to tell you about everything that we're building today.
First, a little bit about me. I started my technology career as a middleware provider, integrating different systems for Neon and moved into brokerage and trading with 10 years at LiquidNet before moving on to Portware, which is an execution management system company. And what excited me about the opportunity at Portware is really a revolution had taken place in buy side trading and portfolio management over the last 20 years, right? The technology that's available is incredible. That was the first time I heard that Gene spent the summer building a trading server with his son, certainly makes me rethink how impressive it was that I helped my son build the LEGO Death Star.
I thought new bar for what I'm going to do with my next summer. But really, what's been happening in the trading and the portfolio management space is nothing short of revolutionary. The systems are all interconnected in such a way that there's both tremendous challenge from fragmentation and tremendous value. When I was at LiquidNet, I had the privilege and misfortune of working with approximately 20 different order and execution management systems and hooking them up to that dark pool. And everyone was different, every single one was a silo, everyone had their own unique workflow that we had to tailor it to get everything to sameness, to get to like to like, so we could take a big block equity order to buy and match it with a big block equity order to sell.
And in doing that, right, seeing the challenge, also when FactSet acquired Portware, I saw the opportunity in it where if you can take a great technology platform and marry it with a company that is incredible at concording different data sets and getting different pieces of this financial ecosystem to talk, then you really have an opportunity. But let me first talk about that revolution that's happened over the last 20 years or so. So going back to the '80s '90s, the automation in which the New York Stock Exchange was a leader didn't really touch the buy side yet. They were automating their own systems and the brokers really automating the trading that they were doing broker to broker on the exchange. So the first piece of technology that really caught on like wildfire amongst the buy side was the order management system, right?
Getting the order from the portfolio manager through compliance and into the traders' hands so that they could pick up the phone and call their broker. Didn't do a lot once it left the 4 walls because it was a phone based trading relationship. So there is a need for a different system. Now these brokers many of them being innovators and disruptors had built these systems for themselves to trade. So why don't I push that system to my client?
So Ready, MS Passport, InstaQuote, start to come to market and guess what, they worked great. And now the buy side has a new problem, which is that every broker they have a trading relationship with wants to have their system on their desktop. Now for the first 2 or 3 or 4 or 5, maybe as a trader, I can handle that. But 10, 20, that just becomes an unmanageable mess and different systems for each asset class too. So there became a need for multi broker EMSs that were hosted Realtek, ITG's Triton product, Trading Screen, so I can now aggregate all of my brokers and all of my electronic trading into one system.
But it still didn't do one thing. And the one thing it didn't do is that the traders still had to click the button. And that's fine if I've got a slow day if you as analysts aren't that active and I've maybe got 10 buys or sells to do. But what about when there's 2,000? What about when there's 3,000?
What about when a tweet can spike the volume of the New York Stock Exchange beyond what we've ever seen it before? Now that's a lot of button clicks and my finger is going to get tired and there's also an opportunity for automation. So FlexTrade and Portware were 2 of the first systems to do that, but the automation what that means is we start to move into a world where the trader can intervene by exception, but the machine is handling most of the trading for the trader, which is tremendous value to funds that are concerned about expense ratios, their workflows to simply managing the amount of information they have, because one of the most precious assets that an institutional asset manager or a hedge fund has is that experienced traders' attention budget. And later on at the end of this presentation, we're going to show you a demo of the power of concording all of this information and applying a layer of intelligent automation on top of it. Portware was one of the first systems to use artificial intelligence and machine learning to drive trading.
The system, as good as it was prior to the acquisition by FactSet, was an empty container. Every time we built and installed a new instance of Portware, we had to go and get the data from someone else. We had to get the security master from someone else. We had to get all the analytics we use from somewhere else. And we did that quite well as a business.
But in terms of scalability, in terms of really positioning it for the future, the power of Portware is multiplied and is exponential on top of the workstation business that FactSet has already built for the PMs and traders and connecting those 2 worlds. So now the EMS is much more populated and functionally rich and it's able to talk to the entire ecosystems of products and that's what we're going to show you at the end of this presentation today. So Portware and Simba, the order management system company we've acquired have come together in the portfolio management and trading solutions business to combine really what's at the core of the portfolio lifecycle that Phil was talking about. So whether it's by building through our workstation, whether it's moving to workflows that are unique to that institutional asset manager, we have the ability to provide a holistic solution that was built from the very beginning and designed from the very beginning to be an open platform, designed with the API in mind, designed in such a way that we know that each of our clients has a unique workflow and we need to support that workflow with an open and scalable platform.
It's a big market. The buy side spends a fair bit of money on this. The last time Greenwich Associates did their survey on trading technology spend, dollars 4,800,000,000 in 2015, and that number is significant. And of that, an additional $1,100,000,000 23 percent pays for the order management systems alone. Why?
Because they're the lifeblood of the buy side. In order to compete in this market, institutional asset managers and hedge funds need great technology to again preserve the attention budget of their portfolio managers and traders. We don't want them doing repetitive tasks that a machine can do for them. We want their data sets to concord. We want their workflow to not have breakpoints in it where I've got to dump all the information out of the system I'm modeling in to bloat it up into my risk model and look there, dump it out again, put it into my order management system, oops, I missed the compliance rule.
Now I've got to do the whole process again. So oftentimes what happens, this is an actual composite. It's just this easy to trade in the with the for an Institutional Asset Manager Day. So this is a composite of what many of the information technology landscapes we come into look like, where there are custom workflows because many of the systems that institutional asset managers are dealing with were never designed to operate in the ecosystem. They were designed to operate in a silo.
So all of these moments of complexity that they see where there's a break in the system, what it results in is a manual process, right, where I have to manually export data out of one system loaded up into another one. And every time I do that, I run the risk of a critical piece of information dropping. To give you a very common scenario, oftentimes the system that a portfolio manager is working in and generates an order in doesn't allow them to give specific instructions to the trading desk. So what does the trader have to do? The trader has to stop what they're doing, move away from their EMS, pick up the phone, call it portfolio manager, I'm them, hey, what did you mean?
I understand that your order says market on close, but did you really mean that or do you want me to go slow? Do you want me to go fast? So all of these little nuances, the technology needs to be smart enough to understand them, right? Otherwise, we're moving to a manual process that is slowing these vital human assets down. They're working with incomplete information.
It's not enough to have a 24 hour batch upload for information anymore. We need to move our products to real time. Everything I'm going to show you in the demo is going to show you the power of those real time updates between the different systems and how much more value is derived in the portfolio lifecycle when the components are automated and open. Now one traditional solution to this has been one size fits none. So the answer oftentimes is if you buy everything from 1 vendor, everything, so from risk, portfolio, compliance, all of those pieces in a static system, they all concord because they were built by 1 vendor.
But oftentimes what happens is the buy side is losing uniqueness and they're losing capability because they're being shoehorned into a particular workflow that doesn't work for them. So if I have to do that, if I have to bend my processes around what my software vendor is able to provide, I'm losing competitive advantage. So in having an open platform that is designed from beginning to work with other technologies, you really have something amazing, the ability to provide a unique workflow for each of those individual asset managers and hedge funds, while preserving scalability and preserving the ability to extend and grow their capabilities over time. So my colleague, Josh Cooper, who is part of the sales engineering team for Portfolio Management and Trading Solutions is going to show you a demo of what we've built and what we are going to be marketing out to our clients in the coming months. I'm very excited about this.
The components that really make Portfolio Management and Trading unique are automation. We handle many more low touch orders for the buy side better than most of our competitors. We integrate. We design again, as I said before, Portware when it came in was an empty container. We didn't have the luxury of saying you must use this market data.
You can only work with these systems. We had to be Switzerland. We had to work with other technology providers because we knew we didn't have every single piece of those answers. So we integrate well with other systems, whether it's somebody else's OMS, whether it's a different risk model, whether it's a new entrant into the market that we think has a disruptive or really unique value to the buy side. For example, LiquidNet with our OTAS product is a very popular add on to the Portware Enterprise platform.
And the information, we have these analytics in house. We have the ability to concord these various data sets. And we're building it all around an API, right? So the portfolio management components can talk to any OMS. The execution management components can talk to any OMS.
Trade automation in which we are a leader, the ability to automate north of 60% or even 70% of the order flow, not just across equities, but across every asset class that institutional asset manager trades is a very unique and valuable proposition to them with room to grow in this market. The order management functions that are critical to efficient operation of all
the internals of an institutional
asset manager or a hedge fund, internals of an institutional asset manager or a
hedge fund.
Do they talk to other pieces, so it's talking right now. So it's critical, right, that all of those components with it, it's not a break in the process when a portfolio manager wants to redo an order or run a trade simulation that that whole chain has to start over. And are we getting all the information to the trader when the trader needs it? Does that trader have all the market side information they need from their Faxit workstation, from the analytics providers they've chosen, from the PM? So with that, I'd like to cut the display over to Josh's laptop and we're going to show you how all this stuff works together.
This is a live demo by the way, so Josh has been up since 2 o'clock in the morning running it over and over again, right? So he's probably clear the way to the coffee station when we're done with this. So what we've done with this application, if you've seen a fax it screen before, this might look to you like fax it PV, Portfolio View. And as much as I love FactSet Portfolio View, you could do one thing in it. You could view.
You could take the information that you had and you couldn't change it, you couldn't modify it. So what we've done with the application that you're seeing it here is we've changed it from a read only application with real time information to readwrite. So Josh has come up with a scenario where he is going to be our hypothetical PM. And what Josh has elected to do is he wants to buy a bigger position in AMT and he's going to sell, right, Josh?
That's right.
Right. And sell into he's going to sell Apple and he's going to buy Chevron. So we're going to generate a couple of orders. Now what he can do in this is see a lot of information about his portfolio in real time. So he can see the construction of the portfolio, he can see the risk, not just with FactSet's model because it's an open platform.
So if it's Barra or if it's Northfield, he can look at those models too because it's an open world. It's an API driven world. We can't just have one answer that fits all of our investors. Remember, one size fits none. So based off of this, he can see all the real time calculations, the real time weight of the portfolio and how that's going to change.
So when he wants to simulate a trade, he doesn't have to walk over to his order management system to do it. He can do it all from one spot. So there Josh has simulated trades. Now typically what happens here for those of you that know a typical portfolio manager workflow is I'm then going to dump it into spreadsheet and try to shoehorn it into my OMS. What Josh just did right there through an API to Simba is check those orders against Simba and sure enough because we set it up that way and we wanted to show you there are some compliance warnings that are coming up.
And right there from the same screen in an instant, we have the ability to override those compliance warnings and send it to trading. Now on a slow day, maybe that doesn't seem like that much of a difference, but what if it's an MSCI rebalance? What if it's a Russell 2000 rebalance? What if I have to completely turn around that portfolio and do those orders over and over again? You can begin to see the power of integration and automation between these systems.
Now we're in Portware. And those are the orders that Josh has sent through, so they've gone straight from the PM through compliance and to the trading desk in an instant. And what Joss is seeing here is this is an industrial strength EMS. The information that's available and
I know this is kind
of an eye test, so you're going to have to trust me. I know you can't see the individual values of it, but we will have a demo station set up later is every piece of information that Josh needs to trade because now in our fictional narrative, Josh is a trader. Every single piece of information that he needs to trade, the bid, the ask, the level 2, the instructions, broker restrictions, if there's a commission target, what comments have come from the portfolio manager, what's the sector? Maybe we want to see if there's something we want to look at like street account from the fax at workstation. So there are controls embedded in the EMS, so he doesn't have to go over and rekey once the order is there.
There are controls embedded that enable him to access all the information he needs from FactSet's ecosystem at point of decision. So that's really what an EMS needs to do. It needs to give the trader all the pieces they need at point of decision in order to make that trade quickly and effectively. So he's going to route this order out, in this case to Barclays. All of Barclays electronic trading capabilities are loaded up into the EMS.
That's what we do. We maintain these current and active links to all of their algorithmic trading. And now that Josh has traded it, we're going to close the loop. And in real time, if you look at the column, you're going to see that Apple has started to sell, right? So it updated in real time.
So when he's selling those shares of Apple, it's not enough to say, okay, the trading desk knows, right? The execution management system knows the order is filled. The order management system knows the order is filled. The PM, when they're calculating risk, needs to know that their position and their portfolio has changed. Therefore, their risk profile, their contribution, their VAR, their tracking error have all changed too, right?
So in real time, we have the ability to update the PM when it matters the most during market hours. So that was one scenario going through a couple of orders, but our clients are dealing with a few different things as well. So let's look at a couple of different scenarios. So well and good that we can do that for 2 and 3 orders, right? But what if we have 1,000?
This is the twinkling grid. This is one of the problems that a lot of traders are having to deal with and it's not really a very efficient way to try to find what's the trade where I want my traders attention budget. So instead, let's look at it in a different way. Let's look at it in a different visualization than the grid. So here we are.
So Josh just executed all those orders, selected them all in one click. Now let's see them moving through a visualization that's going to give us a better picture of where our attention should be focused in the market. So here are all these same orders, right, that are shown in terms of expected value and basis points impact. So over down here in the lower left quadrant, these are all the orders that aren't going to have much impact whether they're traded superbly or whether they're just traded okay by an algorithm on the street. So Josh is going to select all those, wave them off to a broker.
The order I need to be focused on is this one over here, aden.vx, because that's got the highest expected value and the highest impact cost. So where we look to disrupt the market is places where we can find a truly different and meaningful way for the trader and the PM to look at information, build upon what we've delivered already in the fax at workstation and just continue to enrich that ecosystem with not only world class analytics, but also world class automation and intelligence that enables the buy side to do their job better. So with that, I am the last person standing between you and the break. After the break, you're going to be hearing from my colleague, Rob Roby. But thank you for joining and hearing about PMT.
Ladies and gentlemen, we will reconvene at 5 past 10.
To solve even bigger problems for them than they had in the past. And we think the community that we've built of clients and the great culture we have as a company is something we can leverage across our global footprint. This one of the things that I set out to do as CEO a few years ago was really push down decision making into the organization through different groups and through the globe. We still have a long way to go doing that. But I think by doing that, we'll be able to grow our revenues at a faster clip globally by delegating responsibility more to the different regions and we're able to bring products to market at a faster clip for the needs of the different markets that are out there
for
our clients. I visit probably 20 offices a year as CEO to talk to employees and to talk to clients. And I'm always thrilled by the consistency in terms of the culture that I see in our different offices and the positive feedback that we get from our clients throughout the globe. So let's talk about the opportunity. I think it's pretty well accepted that since the financial crisis, our market has been growing in low single digits.
And during that period, FactSet has been taking market share. We've been growing in mid to high single digits over the last 10 years, and we're really proud of the job that we've done operating in I think what all of you would recognize is a pretty tough environment. By most estimations, the size of our market is between $25,000,000,000 $30,000,000,000 And right now, I couldn't be more excited by the amount of product that we have on the shelf and the rate at which new product is coming to market. I think it's the best product lineup I've seen in my career in terms of what we can offer to clients and how we can stitch it together. So FactSet as a company cannot address the entire $28,500,000,000 market today.
We don't have all of the capabilities of all our competitors. But the amount of total addressable market within this $28,500,000,000 is increasing at a rapid pace. So I would estimate that we could address probably half of that today. And the other thing that I think is important to recognize is that a lot of our clients spend a tremendous amount of money building solutions themselves. And FactSet as a technology company is able to, I think, allow clients to outsource more of what traditionally they've built themselves.
So I think this $28,500,000,000 may be a little understated versus some of the themes that we see going on in the marketplace. So how is Fax Head going to win? What is our advantage? We have always stood as a company on 4 pillars: content, analytics, technology and service. FactSet started as a content company integrating third party content into mainframes.
We then pivoted to uploading client content in the form of portfolios and other types of data. And then many of you that have covered us for a long time have seen us become a content company ourselves in terms of collecting our own content. And today, what you're going to hear about from Rich Newman and Lauren Klein is the next generation of content integration on the FactSet platform. For analytics, 20 years ago, I was selling FactSet in Los Angeles, That was my territory. And I would go to a client.
We would set off a 2 factor Brinson equity only monthly attribution before lunch. We would go have lunch with a client, come back and the attribution was done. Things have
Ladies and gentlemen, please welcome to the stage, Rob Roby.
Good morning, everybody. It's a pleasure to be here today. I'm excited to talk to you about the analytics business as a whole. By way of introduction, my name is Rob Roby. I've been with FactSet for almost 17 years and most of my career has been spent in analytics.
So I started off in equity analytics. I helped build out the fixed income analytics offering, as well as focused very heavily on our portfolio services initiative. As you think about analytics, let's talk about the team a little bit. So within analytics, we have a strategy team, we have a product development team, we have an engineering team and we have a quality assurance team. These teams are responsible for all of the core analytics products that FactSet has today.
It's also responsible for the integration of several of FactSet's acquisitions. So a few of those acquisitions include Biasam, as part of Biasam came Cogniti or previously Finanalitica, as well as Vermillion. So, as we look at today's market and we look at what we're trying to achieve, one of the key things that I would highlight is the expansion in AUM and then the number of dollars flowing into the market on a daily basis. Where is it happening? It's happening everywhere.
It's happening in terms of registered U. S. Investors. It's also happening in terms of the large sovereign wealth funds. And the question is, what do you do with these dollars?
Where do you put the money? So from that perspective, what we're seeing is, we're no longer seeing an equity market. We're no longer seeing a fixed income market or currencies or just a derivatives market. We're seeing a multi asset class market. That's been one of FactSet's main themes over the course of the last decade.
And when you talk about content and you talk about coverage, coverage is king. You need to be able to cover all these assets today. For example, if you look
at a
large sovereign wealth fund, wherever they're placing their dollars, they're placing it everywhere. So equities, fixed income, derivatives, currencies, commodities, you name it. They're also doing it in alternative assets. So they're doing it in things like infrastructure, real estate, private equity. What does that mean to FactSet?
What that means to FactSet is we need to be able to cover these assets. We need to be able to take these portfolios in, these large accounts in and make sure that we can cover every single instrument they invest in. The answer becomes why. The reason we need to do this is because we need to be able to actually measure their performance with a great grill of accuracy. We also need to tell them what their risk profile looks like for the investments they're making for their firms overall.
So, where is growth happening? Where is growth happening within analytics? Number 1, it's happening globally. So, when you think about that perspective, it's happening in the Americas, it's happening in Europe, it's also happening in the Asia Pac. When you think about the Asia Pacific region, we continue to grow there and grow there significantly from an analytics perspective.
We continue to see further adoption of risk. We continue to see the further need for the advancement of performance and reporting, and that's really helping analytics from a global perspective. It's also happening in all different types of firms. So it's not just the large asset managers. Yes, we do have 100 of the top 100.
And yes, we do cover not only the large asset managers, but both the midsize managers as well as boutiques. Faxit scales very, very well across the entire market. But it's also now happening in firms like large life insurers. These general accounts can be massive. They can have 100 of 1,000,000,000 of dollars, very similar to the sovereign wealth and the large institutional asset managers.
We'll see a wide array of assets that they hold that we are responsible to cover. Additionally, we continue to see growth in sovereign wealth funds particularly. There's a large market there as well as the plan sponsors, they become more advanced. They're looking to diversify their assets away from their traditional holdings and really expand for the future. And they're looking for the tools that have the capability to help them expand for the future.
So, talk a little bit about the team. We talked a little bit about our client base and where we're winning. The question becomes is how are we doing it? Well, from that perspective, there's 3 main pillars that analytics focuses on every single day. 1 is the increase of market penetration, and that's the increase of market penetration with our core products.
Those core products are mainly portfolio analysis, risk, returns based analysis, portfolio services. Those are the general themes and we invest very, very heavily in making sure that we remain one of the predominant market players there. That includes things such as attribution. It also includes benchmark integration. I'll pause there for one second.
When you talk about benchmark integration today, benchmarks continue to expand and expand, I would say, fairly rapidly into new markets. What does that mean? You have your traditional benchmark players, which by the way, we have almost every major global index provider integrated into FactSet, both at the official index level as well as at all of the official constituent level. But we're also seeing an expansion into things such as self indexing, where large ETF providers are looking to other providers to build indices on their behalf. So we invest very heavily in the integration of indices as well as you'll hear me talk about the expansion of our own index business.
In addition to our core products and where we're investing there, we're also investing very heavily in the integration of our acquisitions. Again, I mentioned Biasam, I mentioned Cogniti, I mentioned Vermillion. One of the things I actually like to highlight is part of the Biasam acquisition came Cogniti, which was Finanalitica. What did Finanalitica provide? It actually provided a very niche yet robust risk platform that Biasam was expanding pre acquisition.
It was widely and predominantly used in hedge funds, but it had very unique mathematical capabilities that actually fit very, very well into FactSet's core product offering. So we're able to integrate that. And you'll hear me talk more and more about you hear about MAC. Phil mentioned MAC. You'll hear about fixed income risk.
One of the themes you'll hear in the coming days, weeks months ahead is unified risk. In fact, this unified risk platform is really the 3rd party integration models, our traditional Mac models and then the expansion of our entire risk platform through the acquisition of Viasand, many clients even clients will ask us, why did you guys acquire Viasand? It does performance, it does attribution, It feels a little bit like portfolio analytics in your core product. And the answer is there, and I'd say, you're right, it does. But what else does it do?
PA is a very good ad hoc historical capable attribution in performance and risk.
We've moved tremendously forward since then. We now have a multi asset class performance and risk product on our system that is world class. We've taken a lot of market share in this space. It continues to be one of the biggest opportunities that we see for our company. And Rob Roby, who leads our analytics business, is going to talk to you about that today.
Over that period, you've seen us integrate best in class risk models on FactSet from 3rd parties, the same way that we did for content. And we've begun to build our own risk models now. A lot of you have heard of MAC, our multi asset class risk model. But since the acquisition of Faisan, which had Cognity as part of it, we've begun to take that to the next level in terms of what we can offer in terms of our own risk models to the market. FactSet has always been a great technology company.
We started with screening and downloading. And today, Gene Fernandez, who joined us about 4 or 5 months ago, is going to talk about the next generation of technology at FactSet, how technology can solve new problems for our clients in interesting ways. If I was to summarize, over the last 7 years, we've invested in something we call next gen, which is the re architecture of FactSet's platform. We've made the big investments to move from an old legacy mainframe structure to a more distributed environment. And we're really in the first few innings now of being able to monetize that investment.
And the way that we're doing it is really opening up our platform to our clients. So we now have ways of introducing value, not just through the workstation and through data feeds, but in lots of interesting ways. And Gene is going to talk about that. I think what he's also going to talk about is what is the workstation of the future look like for our industry. Our clients are looking to have more elegant workflows as they look to be more efficient.
And I think the FactSet workstation, some of our competitors' workstations, what is that going to look like 3 to 5 years from now? That's something that we're giving a lot of thought to. And services, FactSet has always been a great services company. Those of you have that have used our product over the years, I know many of you have, understand how good the FactSet consultants are and the FactSet service model. It is a real differentiator for us as a company.
And John Wiseman, who leads sales for us as part of his presentation, will talk to you about what the next generation of fax and services looks like in the marketplace. So let me talk about workflows for a little bit. A lot of you have heard us talk about FactSet moving from being a workstation to a workflow company or a solutions company. And what we've done internally is really aligned ourselves around these areas from a product standpoint. So we're going out now with strategists that are focused in these areas and we've aligned our development and technology teams around these areas of our business so that we can bring products to market faster and we can make better decisions about what's the next thing we want to develop for different markets.
And how we're going to win in my mind is in 3 ways. One is by completing and filling out what we call the portfolio lifecycle. So the portfolio lifecycle, the way that we define it is taking the research workflow within our clients, whether that's fundamental credit or quant, tying it to portfolio management and trading through to risk and performance through to client reporting. That's what we have in the application.
What PA doesn't do is it doesn't have the entire workflow associated with it so that you can audit and check any data that's moved over any historical period. You don't have the dashboards and the capabilities to actually do the full performance review that something like GIS compliance would require. So we now have a nice offering and blend between the portfolio analytics experience in the front office and middle office tied to the official performance teams embedded within our client base. Now we can offer clients full capabilities in the front office and middle office around portfolio construction and around portfolio analytics and portfolio risk. But now we can also go to the middle office and work very heavily with the official performance system teams and take that workflow, take those signed off analytics, the accountability that's there, merge that together and really bring an entire experience between the B1, BICM application tied very collectively to the portfolio analysis experience.
So you'll hear me talk a little bit more about the data integration and the benefits there. Taking it a step further, what else are we doing? The last pillar is incubating new business lines. So there's 3 business lines that I'll talk about today. 1 is index solutions.
So that ties very heavily not only into benchmark integration and benchmark distribution, but our ability as an organization to build our own indices and to really help in the ETF business, in the self indexing business through unique content and the tools that we offer our clients directly. We also offer a regulatory solution. So we've been doing regulatory for a long time. We've also been doing benchmarks for a long time. This is expansion in those areas, but in new ways.
From a regulatory solutions perspective, one of the key things that we've done is we've gone to the outside market and we've hired a team of experts. We've always internally look stayed close to the regulatory statutes, stayed close to our clients on the day that they need to meet those regulatory statutes, but we hadn't done a lot from an advisory perspective. And one of the things we want to do is we wanted a team internally that we've hired from some of the largest competitors in the industry from a big 4 consideration consulting consideration to really come in and sit down alongside you, our client base and talk in-depth around the regulatory statutes and around the requirements that you have and offer you expertise there. So that's been one of the main considerations. It's not just selling a regulatory data set, but it's selling regulatory solutions.
It's meeting with you to understand your needs. And one of the areas we're going to continue to invest in is the build out of a regulatory platform that not only offers you regulatory data, but offers you a regulatory workflow for many of the regulatory statutes that I'm sure many of you will ask questions on towards the end of the day today. So in summary, those are the 3 real big objectives we have from an analytics perspective: continue to build on the flagship products in the marketplace we have today work on the integration of the products that I described to capture the workflows of the front and middle office, and then additionally to incubate new business lines. So, when we think about some of our strengths, we talked about where we win, we talked about our 3 main pillars of our strategy, what really differentiates us. The one thing I would say about portfolio analysis is it is a truly multi asset class application.
You can get in there and look at an equity only portfolio, you can look at a fixed income only portfolio, you can select any index that's available in the globe today and do robust analysis from an attribution and risk perspective. Additionally, not only do we have our content embedded in there, but we have many of the gold standard third party providers in the industry. So we do remain an open platform. And Rich is going to talk to you a lot about the open platform capabilities and the integration of new data sets, but we've always integrated the best third party content in the industry that our clients have demanded. That gives us full coverage across the entire globe.
On the multi asset class risk front, you'll see a slide shortly that talks about our 3rd party partnerships. We started with a partnership with Northfield adding their factor models and their optimizers to our platform. We also partnered with MSCI. We've partnered with Axioma. We've partnered with a number of the 3rd party industry leaders.
But as of late, we've also started to build our own risk models. Question is, why we started to build our own risk models when we've integrated the best in the street on the 3rd party side. We've seen a demand from the marketplace that is asking for new and unique approaches to how risk is calculated in the industry today. So we took our research team and we've been evaluating our capabilities we've built a best in class fixed income model and multi asset class risk model to also be available in the industry. That also was further elevated and pushed forward by the acquisition of ViaSam and Cogniti and the capabilities there.
So for example, one of the things Cogniti does that's quite unique and they have IP around in the industry is how you handle fat tail analysis when you're looking at risk. We were able to take that, use that not only from a Cognigy standalone perspective, but integrated into the portfolio analysis framework. Additionally, when you think about multi asset class performance and attribution and risk, Phil mentioned 20 years ago or probably even longer than 20 years ago now, 2 factor equity Brinson methodologies for attribution. I can remember the days where you're grabbing monthly files and you're trying to load monthly files into an application and you're running very basic attributions to get a rough estimation is how a portfolio manager exceeded or underperformed their benchmark. Good news is, those days are a little bit behind us now and I would say that FactSet offers 7 different families of attribution models in the industry today.
Those 7 different attribution families, I didn't say models, you can have many different models within each one of those families. But out of those 7 families, you can do equity attribution, you can do fixed income attribution, you can do balanced attribution. And the other thing you can also do that we're getting ready that's actually in beta right now and released for some clients is passive attribution. So the question becomes is for the active manager attribution is great, what do you do for the passive manager? There are passive attribution models and there are benefits to running analytics from a passive perspective.
So we've invested very heavily in continuing to be at the forefront from an attribution perspective. We've also done the same thing with our risk analytic capabilities. When you talk about risk analytics, you have to talk about OAS models, you have to talk about Monte Carlo, you have to talk about prepayment and loss. And the reason why I highlight those in particular is you can't have check the box numbers. If you're dealing with a structured product portfolio manager, you need to have the best prepayment and the best loss models in the industry.
If you're dealing with a heavy degree of credit focus, you need to have the right focus on OAS. So those are key ingredients into the calculations that we're able to provide. As I jump into risk, the one thing that I didn't touch on that slide was about scale. And FactSet has always been at the forefront in technology, and Gene talked a lot about our transition and our investment in furthering our technology. From that perspective, there are 4,100,000 portfolios that sit on FactSet and are uploaded every single day.
That is a tremendous number of portfolios. If I try to give you the AUM number on that, I'd be a little amiss, but it is 4,100,000 portfolios that we upload every single day. You need to have scale, you need to have infrastructure, you need to have speed in order to do that. And when we load them, we don't only load those portfolios, but we run the analytics on those portfolios in real time. So that as users relying on our applications or relying on our data can get that information at any hour or minute they need that.
Further, as I talk about unified risk and our expansion there, why does risk matter so much right now? The one thing I'd say of why risk matters so much right now is, again, it's not only factor models. We're moving beyond just factor models, just optimizers, just portfolio simulations, and we're working into an environment now where you need to have full coverage, infrastructure, real estate, private equity. You also have to have the ability to calibrate the models potentially investment objectives and the risk profile that you need to achieve. So John Wiseman, our Global Head of Sales is going to talk a little bit and I don't want to steal his thunder, but one of the press releases we put out was the recent partnership or the recent client that we've worked with called Alberta Investment Management Company or Aimco.
It was a large unified risk win for us and that was possible due to the integration of Cogniti, due to the FactSet Mac capabilities and due to the front end applications that we're able to produce and that we have in the industry right now. A little bit of history on portfolio analytics and the evolution of risk. If you look back to 1998, again, you'll see that's where we started the formation of our 3rd party partnerships. And then in 2013, you'll see that Faxon really started to invest heavily in its own multi asset class capabilities, not only doing it from a Monte Carlo perspective, but all other different types of methodologies such as linear macro risk and then came along the Cognigy acquisition as part of Biasam, which further allowed us to bring our risk capabilities even further into the marketplace. The risk pieces wouldn't be possible unless you look at the top of the slide.
And when you look at the top of the slide, you'll see portfolio analysis. That is the application where a lot of this information comes to life and is readily accessible and usable. The other part of it is portfolio services. What is portfolio services? It's been an area of acceleration and growth for our business.
You've heard us talk about it for about probably the last 5 years since its inception. But as we're loading these 4,100,000 portfolios onto the system, we're producing analytics that are much more robust than they were 20 years ago. The question is the quality and the timeliness of that information. So we've invested very heavily in the technology to not only integrate indices and integrate client portfolio holdings, but make sure we've integrated it the right way. If something kicks out, it kicks out in real time, doesn't matter what time of day or night it is, we're taking a look at it and we're trying to understand why.
Once we know it's loaded and it's complete, we're running a full set of analytics. As we run those analytics, again, we're making sure that all the analytics that you rely on are accurate and correct. And that's all transparent through an application called Control Center, where you can actually see in real time not only what data you're going to have available to run, but the quality of that information as it comes through our system. This really ties back into the consideration the portfolio lifecycle for Faxit. So, we talked you heard John talk about the PMP aspect.
You heard him talk about real time risk. A lot of that becomes feasible because analytics and PMT have a close relationship and you can now use these things such as real time risk to trade your portfolio. So that helps out on the front side of the portfolio lifecycle where you're talking to the front office. This also helps us on the backside of the portfolio lifecycle where you start to talk about client reporting. So I didn't talk in-depth about Vermillion, but I will for a quick moment here.
Vermillion is a very robust reporting tool that Faxit has acquired. Why did we acquire Vermilion? The reason we acquired Vermilion is FactSet has native reporting capabilities within it that are quite strong. But the difference there is it's very heavily reliant on Faxit data. And a lot of clients were coming to us saying we want the ability to not only use Faxit data in your reporting capabilities, but we also want the ability to use other sources of information that we have internally.
It could be a data warehouse, it could be other third party providers that they have direct relationships, it could be unstructured data that FactSet knows nothing about. Vermillion gave us the experience to have a reporting capability, a reporting engine, a reporting platform, a reporting workflow to have FactSet's data move into that application in a turnkey environment, so the client is no longer stressed about getting information out of a system such as ours, but can then also quickly integrate data from other locations into a full on reporting suite. So on the back end of the portfolio life cycle, as I described, all of the attribution, all of the analytics, all the risk numbers I'm talking about not only reside in FactSet and FactSet reports, but are also turnkey into the Vermilion user experience and the Vermilion reporting capabilities. So, talking about that in a little bit more detail, as we talk about the bringing the acquisitions together, as we think about BI SAM, the big thing going on right now is the data bank, the data wall, and that's the ability to transfer information between PA and our analytical applications and buy SAM in real time.
So clients that are running official performance via the B1 application and want to see it in PA, it all transfers through essential data layer and is completely turnkey. Same thing, clients that are running B1 or PA, they want PA numbers and analytics to also become available to the middle office for the B1 user experience, the data is fully transferable between the applications. Not only it doesn't stop between PA and BI SAM, you can also send BI SAM information directly into the Vermilion reporting experience, application and workflow, and you can also send FactSet portfolio analytics information directly into the ViaCM user and workflow. I'll touch on the 3 new business lines quickly. So we talked about where we stand on our core products and our core investments.
We talked about the integration of the recent acquisitions that we've made and the reasons behind those. And now let's talk about where we continue to expand within analytics. So from the regulatory solutions perspective, we get asked questions all day long around MiFID. I guarantee you're going to ask questions. I've got a number of questions for you on MiFID.
But we have a team of experts now very heavily dedicated to each point of that regulatory statute to really partner with our clients and understand the solutions we can bring, the tools we have today, as well as where we believe that regulatory statute is going in the future. It's not just benefit, it also holds true for N Port, it holds true for Solvency II, Prips and Kids. Those are just a few we're heavily focused on. Not only are we focused on them from a data experience and to solve the information you need to build out and to meet those regulatory statute requirements, but we're also very heavily on focusing on the reporting side and we're also very heavily focused on the on platform experience to take this to a whole different level. Index solutions, so we've been in the business of integrating third party data, as I mentioned, for a very long time around indices.
As we've also been doing that, we've been collecting a lot of our own content. And as we've been collecting a lot of our own content, you hear things such as GeoREBS or you hear things such as Rubix, that all came through the Revere acquisition. As we're putting all this information together, a lot of clients are coming to us and saying, can you build indices with us? And the answer is yes, we can. And what have we done to date?
We've there's over 67 indices in the industry today that are either co branded with FactSet or rely very heavily on FactSet's information. One of those indices in particular or one of the indices for an ETF in particular is the iShares Automation and Robotics Index. It has become number 12 out of the top 20 in terms of new AUM flowing into an ETF. We're very proud of that. That ETF is very heavily driven off of the ribix proprietary information that FactSet provides.
So as we continue to invest in the area of index integration, unique content sets and our tools, you're also going to see us continue to expand in terms of our index capabilities. As we think about the future and beyond a little bit, Jean talked a lot about APIs. One of the things that we've been heavily invested in over the last 12 months has been bringing analytics APIs to the marketplace. So everything I've just talked to you about, portfolio analysis, risk, that entire experience, it's definitely a very powerful tool and very capable within our platform. But a lot of clients are coming to us saying, what can I do off platform?
We want the attribution models, we want the risk numbers, we want the calculation engines, we want all of those features, but we want to take it and build it ourselves. They're hiring developers. They're hiring engineers in house. They want to integrate different information, different solutions from different places. One of the ways we can bring that to market is through analytics APIs.
So what we're going to be doing is releasing and this is actually already released for about 3 clients in the market today is we're are going to be releasing a full blown development portal around analytics APIs in the near future. With that, I'm going to turn it over to Rich Newman and Lauren Klein. And Rich and Lauren are going to talk to you about Content Technology and Solutions as well as Open FactSet.
Thanks, Rob. Appreciate it. Just want to tell everyone here, I'm thrilled to be here today to talk about Content and Technology Solutions Group. I'm Rich Newman. And I want to give you a little bit of background about how we got here with CTS.
Many of you have been hearing about it lately. It's been getting a lot of positive feedback. It's been a huge growth engine for FactSet, particularly over the last few years. To give a little bit of background, I arrived at FactSet in 2000. I like to say I was the founder of a company that was FactSet's first acquisition.
I love that role for a long time. Obviously, over the last few years, we've had many more acquisitions, but I still wear that with a badge of honor. And some people wonder how can an entrepreneur like me be at FAX at 18 years later. And the reason why I'm still here is because what FactSet has allowed me to do is to monetize core competencies of FactSet and create ASV and revenue from it. I'm not interested in R and D, again my background is to build businesses, to build revenue, to build growth.
And FactSet has given me that opportunity. When I arrived in 2000, the focus was again trying to get FactSet at that point to move beyond some of the workstation solutions. My background was much more in the quantitative area. I had built very large quantitative systems, particularly for buy side organizations. And the goal was to take the quant business, FactSet's workstation based business, and begin to move that more to production.
And the production side of that was again to provide daily updates to that information. And as you see on the slide here, we built systems to feed 2 production solutions what we called production intricacies. It was great. We were growing the business. The challenge was scale.
That business was very custom. Each client had their own way of doing things. I have to admit, we still have legacy situations where we have that old code in there. Moving forward, as many of you know, we began to acquire our own content, either create it, acquire it, integrate it, always leveraging our own and integration capabilities. And we built what was then the first business around CTS, the idea of taking our data feeds and standardizing them, so that we can support clients better and build more scale in the business.
You move forward and we again, it's probably started more in a quant area. But what was amazing once we standardized those feeds and you think about the content we have, fundamentals, estimates, ownership, M and A data, We acquired Revere, which was supply chain data, which was in a sense in our first step into what now is called alternative data. And we integrated that data, providing a standard framework for that, the business has really grown. And it wasn't only quants at that point. We began to feed performance systems.
We fed regulatory solutions like Solvency II. We created benchmark data feeds, again, feeding performance systems for feeding compliance systems, back end and middle office solutions. It's been a great ride. It's been fun. As you see from the slide up there, we are now over 9% of Fax's business.
We're material. It gets announced. I'm always excited when Phil mentioned CTS on the earnings call. And we're growing at a compound rate of 15%. And my goal is 15% is not enough.
We want to enhance CTS and make that growth rate even faster. The opportunities out there with alternative data, with more computer processing are huge. And the opportunity that we really saw about over the last year was how do we move even faster? Does facts that collect more content, create more and more of our own content? Or do we in a sense get back to some of my roots and think about partnering with all the big data firms out there, all the Fintech organizations to create a marketplace for that information.
We're going to jump to open facts soon, but before we get there, I'd like to introduce Lauren Klein.
Hi, everybody. My name is Lauren Klein, and I look after the OpenFacts at marketplace, business development and our relationships with our 3rd party data providers. We're so excited today to be talking about CTS as well as the brand new Open FactSet marketplace. So we were able to accomplish the launch of Open FactSet because we have such a strong foundation in content and technology solutions. And a lot of our competitors have content as well.
We know that, we know that they have their own content they're collecting, and we know they also work with 3rd party data providers. So we believe that we have the strongest industry leading content for a few different reasons. First is our symbology. No one links and connects content better on an enterprise level than FactSet. You'll see in the image above that middle circle that FactSet reference hub, it is so key.
Every time we're collecting a new data set, acquiring a new data set, like geographic revenue, Revere, some of the data that Rich mentioned, or partnering with a firm that provides data, it's all connected to that reference hub. So imagine you're quant sitting at a big asset manager and you're trying to do some analysis on Adidas. Well, FactSet Fundamentals might call Adidas, Adidas LLC And a 3rd party sentiment provider might call Adidas, Adidas Inc. If you're trying to query that, you're in Python, you're trying to code, you're not quite sure, are those the same Adidas? And what if there
was a corporate action? What if there was an acquisition?
What if they're traded on different exchanges? They're typed differently? What if there's a spelling error one day? Well, FactSet does that all that hard data integrity, linkages and symbology, so that all of our users can get up and running testing, using and generating alpha incredibly quickly. The second area where we feel we have a very strong content advantage is around our expertise with our CTS team.
John Wiseman, the Global Head of Sales will be up next talking about one of our pillars, which is service. I started my career at Backfit 12 years ago on our client services team, and we have specifically for CTS an implementation team that sits alongside clients, implementing data feed solutions, providing a true white glove service. And then finally, the last area where we believe we have strong expertise is our speed to market. With Rich's leadership within our team, he is always encouraging us to move faster. We're out there chatting with clients all the time.
We're responding to their needs, what's happening in the industry, and we want to go to market with solutions as fast as possible. And as we talk to clients really over the past 12 months, we noticed a few key themes that the financial industry was shifting to that provides an amazing opportunity for a firm like FactSet. We're incredibly well positioned to capitalize on these four trends that we're seeing in the industry. The first being what Rich mentioned earlier, the growth in alternative data. The amount of data being produced these days, whether from FinTech companies or firms even larger than FactSet is amazing.
What we're going to do is, if you remember that reference hub, we're going to take it all, work with these providers, link it together and be able to deliver it out to our clients. Another shift that we've noticed is presents an incredible opportunity for FactSet in the coming year is this rise of data scientists. We're seeing our firms hire more and more titles like data engineers, quants, data scientists, more technologists that need the data in a flexible manner and they need really strong industry leading content.
And data science is really interesting because, again, I've been in the field for a long time. And when I was at a speech recently I was giving a speech in London. And the question was asked, what do you look for when you hire new people? Where's the industry going? Where's the growth?
And I said, you know, it's gone from people still need a finance background clearly. I want to make sure I know a lot of you have finance backgrounds, that's very important. But the other thing we've definitely noticed is this need for being able to be technical, being able to know math and so on. The additional characteristic I say is just being creative. You no longer can just follow Graham Dodd when you do your investment analysis.
You have to be very creative when you're finding new ideas. The whole idea of moving from active to passive is real, but that doesn't mean active isn't there. And active means using things like satellite images or using things like new sentiment information or using other types of data and providing the data science group that actually can make sense of that and ultimately provide alpha. The other trend we've seen in the industry is the infinite computing power. The fact that it has our own data centers, we've been incredibly successful.
We like to say sometimes we were the cloud before the cloud. But there is a real cloud opportunity out there. With increased data, big data, increased need for machine learning, what we've been able to look at is we can either keep enhancing our data centers or leverage the cloud. What the cloud provides us and provides you and users out there is infinite capacity. So now when a large hedge fund or asset management firm or sell side organization wants to run 100 natural language processing algorithms around fact sets earning transcript information, that transparently could be available in terms of how much it costs and so on.
So both the power of the cloud and then the power of machine learning, being able to do these applications with using computers is really out there. We are going to be leveraging that with CTS and with Open FactSet. And that's the opportunity we see. And those partnerships we're seeing with the cloud providers and things you're going to see coming out from us in the CTS group soon, you're going to see how we're partnering with the cloud providers in this space.
And with that, we'd love to introduce you all to the Open FactSet marketplace. So we're going to switch over to the live screen here. What you're seeing is open. Backset.com. It's completely open.
So if you have your computer open right now or hopefully you're not on your phone, but if you are or during the breaks, we encourage you to check it out. So we're 7 days old. We launched last Tuesday and the feedback those first 24 hours was phenomenal. A few different things that we were commenting on, one is we had a lead in every single region within the first hour. Our first Asia Pac lead came in, the first EMEA lead, the first Americas lead.
And when I say lead, that means it's a request to trial or even purchase our data set. The second really interesting piece of feedback within that first 24 hours was we were getting trial requests for our brand new provider content. We're going to introduce you to some of those providers in a second. But we also were getting leads for our own content. We had clients clicking and calling us saying, we've been a FactSet Fundamentals data feed subscriber for a decade.
We didn't realize that you guys had supply chain. That's a great complementary data set that we'd love to trial now. And then the third really interesting thing that happened in the first 24 hours is besides clients contacting us, we had a number of data providers reach out to us and say, we want in on that marketplace. And these were anything from startup Fintech firms to again firms that are bigger than that have really strong financial data. So the network effect is definitely real and we're seeing it even in the 1st 7 days after launch.
I have to admit I've done many product releases in my career and this has been the most exciting and it's just transformative not only for FactSet, for me personally, it's just been amazing to see the enthusiasm. And as Lauren said, we got inbound requests, not only from clients, but from potential partners. I won't cite the names yet, but what really amaze me is some very big players, bigger than we are, who said, we want to be on this marketplace. Again, I hope many of you saw in a press release, many of you or some of you maybe have even tried the OpenFAX at marketplace. Now what you see in the public site isn't everything.
Clearly with a login, you're going to get a lot more information on it. What we'd like to do is take you through a little ride and show you what the OpenFAX in Marketplace looks like, highlight important areas. But getting back to what Lauren showed before in that wheel and the connectivity, the key for every partner, and we're vetting this very carefully, is to remember, this is institutional. We're not trying to create a store, where you basically just have various feeds on the system from any partner. Every partner is vetted, they need to be financially sound, they need to already have clients.
And basically what we're going to be providing to them is that distribution, that connectivity. The whole idea now is that users and data scientists don't want to just look at one piece of information. It's the connectivity across that information and the ability to do that more quickly. You go to a firm and many of your firms, you'll hear 90% of the time is spent on data integration. We want to do that for you so you're spending your time on data science.
So to begin, one of our goals is to make sure that people come back to the site. So what's new obviously has some new data feeds because we just released last week. And Genscape, which is a satellite company and Estemize, which does some, crowdsourcing earnings estimates. Alexandria is a sentiment company. And Repris is an ESG company, environment, social and governmental information.
Again, going back up top, the beauty of these, these are all leaders in their area. We spent a lot of time over the last 3 or 4 months linking this data in. But like anyway, if you think about you go into a marketplace, first thing you typically do is go to a catalog. And then we have categories of data from different types, corporate activism, crowd source. So what you're going to see, and also our idea to get people back, is we're constantly adding not only new databases and new sources, we're going to be able to show what's new and what's coming.
I think Lauren's probably spoken to 300 or so partners already, potential partners. The demand to get on the marketplace is already outstanding. So let me look at again, there's various types of data you can see here. But if we looked at ESG, what you quickly see now is here's some data sets for ESG. Reprisk, as I mentioned, is a partner.
They're actually based in Europe. And they have ESG data. True Value is coming soon. It's another ESG partner. Again, we're open.
We're not going to be selective and exclusive as to who becomes a partner in Open FactSet. If I go to RepRisk and I ask for more details, every partner gets a page like this. They're basically and by the way, FactSet is our best partner right now. We have 20 data feeds from FactSet alone, you've heard of them. But FactSet also gets a page for each data feed and a data science piece and so on.
So when you come to a page, you're going to see some highlights, you're going to see the geography, what regions are covered, then every partner I'm going to try to play this, I hope it works, but
OpenTextNet is proud to partner with RepRisk. REPRISK provides access to the world's largest due diligence database on environmental, social, governance and business conduct risks. Its data allows for quick and easy in-depth risk research.
Don't worry, I won't play the
whole thing because Rima will get upset if we're going running out of time. But I'd love to play the whole thing. But think about it, every partner, why they want to get on the marketplace, is they're getting that, they're going to get that. And also what we call at a glance or data science piece. So again, we have a data science team within CTS.
And for every partner we have, they're working with the partner, putting together what's the use case of that data, basically some images, and ultimately information about how that, not only that firm, that partner works within itself in data, but how it links to faxed content or other content. So again, the power here is the video, other information. And the piece that I think a lot of people really like to see, and I'll pass this on to Lorne now, is what else are we providing there?
Yes, definitely. One of the neat areas is the related product section at the bottom of every page. So think about marketplaces you guys use probably on a personal level like an Amazon. You go on Amazon and you're about to buy sneakers, it might prompt you saying people who bought sneakers also bought athletic socks. We've done the same thing with data feeds.
And that's really in part to our data science team, which has done a really incredible job thinking about which content sets are complementary and putting together those pieces, giving them ideas on what they can use together. So within related products, under Repris page, you'll also see FactSet Supply Chain Relationships. And if we go to FactSet Supply Chain page, you'll notice it's identical to Repris page in the same format. So every single page up here, every single product has that same video, has that same data science piece and has a lot of information about the feeds. One thing we also want to make really clear, unlike in Amazon, we're still targeting institutional.
Our own data feeds are expensive. We're going after institutional clients, not retail, same with our partners. So we're still going to give again that high touch service, that white glove implementation and everything that goes along with buying a data feed involved in this open platform marketplace. And our favorite part of the site is probably when you click Contact Us, what this does is it generates a lead to FactSet that our entire sales team will follow-up on. And that's what's really been happening over the past 7 days.
And we're excited for it to continue to accelerate FACTSET's business. So what's next? We're not done. We go back to the slides. We actually have an amazing short term roadmap ahead.
We have a lot of things coming up over the next couple of months that we're excited to give you guys a peek on right now. The first is the expansion on the number of providers. So Rich mentioned, yes, I've probably had conversations with about 300 different data providers. It's not hard to get meetings. It is really hard to vet them.
So when I'm looking at data providers, I'm looking at it through a lens of really 3 different angles. One is, I'm taking a look at their data, making sure they have very high data integrity, very high data quality. The second thing I'm looking at when I'm vetting partners is market demand and uniqueness. FactSet has an amazing inflow of client requests every single day saying, could you guys add ESG data? Could you add this specific provider?
Going through those, seeing which providers have the most market demand. And finally, the third thing I'm looking at is business credibility. I think especially when partnering with some of the smaller Fintech firms, we want to make sure that they have 20 fourseven service. We want to make sure they're fully funded, that they have a strong Board of Directors behind them. So I'm looking at data, but I'm also looking at different businesses, as well as fleshing out a whole portfolio of unique companies to be able to offer to our FactSet clients.
So we're definitely going to be expanding the number of providers, so you can continue to check the marketplace. But besides data providers and Open FactSet, we're also going to be adding solutions within that same
Keep watching, there Keep watching, there's more to come. And again, data feeds was the start. Back to my roots and back to sort of what Phil Snow says to me, it's to monetize. I'm not here, it is fun, I admit it. But we're trying to figure out a way to quickly enhance the CTS business.
With OpenFacts and with the data feed, it's already enhancing it. We're getting leads into clients we never got before. It's amazing, within a week, because of the OpenFAX and Marketplace, just on the data feed side. What's next? Well, clearly, there are solutions out there that need content.
A lot of Fintech firms and also a lot of larger firms that need, have solutions that need facts and content. Alternative data is very important for them. So over the next few weeks, you're going to be seeing some press releases and some announcements of some FinTech firms we're partnering with, who will be part of the OpenFaxit ecosystem. So again, basically providing what we're calling solution exchange to the Open FactSet marketplace. So again, I expect you all to be paying attention every day.
The next piece after that would be what we're calling a research environment, partnering with the clouds. Think about what we're doing now. We're providing data feeds to clients. Clients are basically creating their own SQL environment, putting that data in and creating applications. The next step is, why don't we just host something like that and provide an environment with, again, unlimited scale, unlimited capacity, with all the data loaded fax and feeds, but all these alternative partners.
That will be in a cloud environment. Again, that ability to have infinite capacity is part of that. So in a sense, a research platform, where firms are going to want to do some work on that SQL database, tie it into R, tie it into Tableau, maybe use some Python and so on. Again, the growth there, and you can think about the economics and the business model, we're moving much more to a usage model in that situation. And the last piece, and this is the grand vision, is more again, the ability to provide an API environment.
Again, not only for solutions that are already built we're partnering with, but the idea that we're building an environment where developers in the community look at OpenFAX as the way to build their solutions. That's the ecosystem we're building. That's the exciting way we're going. It started as a dream with CTS in a sense, and it's moved on now. So I'd like to then say it's one of the material part of Faxit's business.
It's been a great journey and ride for both Lauren and me and the rest of the team. It's just beginning. That's the real exciting part of this. So with that, with exactly 10 seconds left, we did it. That was great.
I'd like to introduce John Wiseman. And I admit, I've known John a long time. And John is because of OpenFAX that released this past week, he's very busy because his sales teams are creating contests to see how much OpenFAX that they can sell, how many leads they can generate, basically what's the leaderboard, Phil Snow wants to get on it. So sorry, John, for keeping you so busy for the last few weeks, last week, but we're going to keep you busier. So thank you very much, everybody.
Good morning. It's a pleasure being with all of you today. I'm going to talk about 3 broad topics. I'm going to talk about our sales strategy and our client approach. I'm going to talk to you about our people, the size and shape of the organization.
And then last, I'm going to talk about our regions. I'm going to talk to you about some of the attributes they share and then where they differ. In terms of our sales strategy, focus, engage, act. These are kind of like our mantra. It embodies our approach to clients, how we collaborate internally and it permeates everything that we do each and every day.
I've been in this role 12 months now, and I would say we have greater focus, we have a greater level of engagement and we're being more decisive in the actions that we take. I think there's early promise in the results. It's validating our approach, but there's still work to be done. When we talk about the sales strategy, it's really the 4 tenants of what you see in the slide above. The first drive core facts at ASV through new and existing business.
Sounds pretty basic, right? It's what we need to do, right? Get back to fundamentals. We have 1500 people in the Global Sales and Client Solutions organization. They are focused both on existing business and new business.
As most of you know from following our company, a great majority of our ASV comes from existing clients. That said, we have teams that are focused and engaged directly and daily with our prospects to bring in new business. Rob Roby mentioned Aimco, Alberta Investment Management Company. To just give you an idea that our new business teams and business development teams were not down chasing the short tails, the $200,000,000 to $300,000,000 hedge fund. We are focused across the board.
That is a large strategic win for us. It's in Edmonton, not a place you normally travel to or would prospect and it shows our enterprise sale. So it's a great example of when we talk about new business, the level of focus and engagement we have there, while as it relates to what we're doing on the existing business, we continue with our client service teams and the 1500 person strong organization continue to drive for results. Again, focus, engage and act. 2, Phil mentioned this about regionalization.
FactSet had been more of a centralized organization as it relates to sales and how we looked at it. As I came in, what I wanted to do was empower and enable the individuals in the regions to drive and deliver results to allow them to be more agile, more active and nimble. We have incredible talent in our regions. We have strong managers. It's incumbent upon us to empower them and give them the ability to act.
They know their clients, they're focused on their markets, they're engaged with their clients each and every day, they know the products and services they need, empower them. Regionalization, second thing that we did. Cross selling and upselling, we have a tremendous amount of products and services in our stable. You've heard that from all the people today. In addition to the acquisitions that we brought on, now we only have enhanced our capabilities as it relates to what Phil talked about the portfolio lifecycle.
Our ability to start from idea generation to risk performance, trade execution and client reporting. Now we can complete that whole cycle. Our ability and again, when you go back to number 1 and our core strength where we drive ASV through our existing accounts, the ability to cross sell and now up sell has been completely enhanced and increased through those acquisitions as well as the stable products that we already have. It is what we do. When you look at better ASV growth, that is cross selling and up selling within the organization.
So there's a strong emphasis on that and the acquired companies only add to our capabilities. Elevate our approach toward most strategic accounts, kind of seems simple. Most people have strategic account programs, that's not novel. Facts that typically have looked at its accounts and again there's a disproportionate amount of ASV in those top 50 accounts. Historically, our strategic accounts were embedded within the regions.
What we've done in the past 12 months is lift them out of the regions, give them direct line of sight and accountability. As Gene was up here before, he's brought a new phrase in the FactSet, it's called one net to choke. So we've put one person responsible, Tom Griffiths, he's a senior manager. He looks after our global client team. We've also created a new role called an executive relationship officer.
We've taken some of our most senior managers and we've put them back in the field to raise the level of engagement in the C suite to increase our opportunities that we have in those largest and most strategic accounts. So we have direct accountability, direct focus and we've raised the engagement. That's a change, that's a difference. Focus, engage, act. That's not something that we just talk about externally and apply in our excellent approach.
It's something that we're using and I've directed my managers to focus on internally. We've enhanced across the organization our level of collaboration and engagement across, amongst and between the portfolio development of the product developers rather, the engineering teams, marketing, sales and our workflow strategists, right? If we're going to unlock the true potential of our offering, we need to create that level of engagement. Not only do we want to solve our clients' greatest problems, we need to solve our own problems and challenges by working together and collaborating. And indirectly that's solving our clients' problems.
2nd, we've looked at driving efficiencies through our client service and client solutions business. We've expanded our footprint in our centers of excellence, gaining and driving efficiency through the process while not losing quality. Last, in terms of focus, engage and act, business information and business intelligence to arm the sales force, data driven metrics that are necessary to move forward. We have not fully implemented, we're close to completion of an implementation of sales force across our client facing staff. That's going to give us the business metrics and data we need to inform us to make sure that we're attacking the prospects in the right manner, that we're following up in the leads, that we're engaged with our clients in the way that we need to.
We're getting white space reports which we're using today, which is aiding in the cross selling and the up selling efforts. We're getting Compass or client satisfaction scores and ratings. We're more informed about our clients. Solve our clients' greatest challenges with the power of collaboration. That's not just our corporate mission, that's our sales mission, right?
It's in our culture, it's in our DNA. We are problem solvers, we are analytical by nature. We at FactSet love rolling up our sleeves, right? We lead from in front. Everyone gets down and dirty.
We are out there in a native habitat with our clients where they live, sitting with them in direct collaboration and partnership, understanding what their challenges are. What we're looking to do and that is our mission is to take those challenges and create opportunities. We love to talk about capabilities. That's what we talk about. Our capabilities that FactSet brings to bear and in partnership with our clients, their capabilities.
And it's the marriage of those capabilities and that partnership that creates something truly unique. And that goes to what you heard Gene talking about when he was thinking back to his days at JPMorgan and he was approached by FactSet and it's our selling approach, it's that consultative collaborative approach where we're really trying to marry those capabilities together to create those opportunities, right? It's a consultative selling approach. You could call it solutions selling, we could call it enterprise selling. We talked about our transformation and our move from not just a workstation but to a workflow company.
This is that transformation. It's our approach. We look at our clients, we look at the client enterprise. We then look at our capabilities and the 4 pillars that we can bring to bear, content, analytics, technology and service. Let's talk about 3 of them right now.
Everyone is everyone that you've spoken before me has touched on this, from Phil to the strategist and the product heads in Gene, content, they say content is king. Lauren talked about our Edge, our DMS or data management service or our EDM or entity data management. The way we stitch these disparate datasets together in that FactSet hub to create an essence from the client perspective a seamless database, right, of a bunch of disparate data. This is clearly whether it's our proprietary data, the client's proprietary data, 3rd party data or more and more what you see now is unique and alternative data sets. This is one of our competitive advantages and how we win.
We do it and Lauren and Rich talked about this. We do it in a way where we're flexible and we're open. So I'm jumping over to our 3rd pillar in terms of technology. That openness, that flexibility that we offer our clients as we deliver that content irrespective of the mechanism whether it's on our workstation, whether it's on our off platform feeds and APIs and on demand services or where it's hosted in the cloud and what Rich and Lauren are building with Open FactSet or giving it to a quant shop who's ingesting into their black box and using it their way. Our ability to serve them up that content in conjunction with theirs and that FactSet hub make it truly unique.
But it's the flexible and open technology that modular approach that openness that we take. We're in some ways technology agnostic. We don't want technology to be the inhibitor. We are a technology company. We are providing that, but we also know and it's part of our what we feel is one of our missions and our competitive advantage to be open.
Let's hit leading analytical applications, the 3rd pillar, kind of analytics, but really the applications. Let's talk about that. So I'll talk about it when I go to the 4th pillar on the next slide. But I started at FactSet in 1991 as a consultant. At that point, we were I'm going to really date myself here.
We are a DOS based communication software. All we did was through a phone line, a POTS line, we allowed you to connect to our mainframes and get a bunch of third party data. None of it was ours. We served it up to you. We had a couple other services like universal screening, data downloading.
We just started alpha testing. XL didn't exist. You were in need of Lotus 1, 2, 3, VisiCalc or maybe you were a Borland guy and you had Quattro Pro. But that was the world we lived in, right? Today, through all the different applications and analytical tools that we provide inside those applications, we can take you as I said before from idea generation, pre and post trade compliance, what if analysis, execution, risk performance and client reporting, the full cycle.
That is something again with the acquisitions that have helped in terms of the PLC, but that's what we're talking about in terms of how we win Marion that content with analytics and applications and flexible technology. Let's talk about our 4th pillar for a moment and it deserves its own slide. I talked about the sales organization being 1500 people strong. We call ourselves Global Sales and Client Solutions. Over 70 business leaders, 28 plus offices.
Of that, 1,000 people approximately are focused on client service or client solutions. They handle 27,000 inbound queries a month via that via I'm email over telephonic. We have a 95% satisfaction or very satisfied rate score on our customer surveys that we do. So again, continuing to evaluate these self critical, continue to deliver on that message of quality service. And 42,000 actual physical visits out in the native habitat that I'd like to talk about where our clients live.
We go see them. We touch them 42,000 visits a year. Industry acclaimed award winning, valued and appreciated by our clients, envied and feared by our competitors. It is our 4th pillar. It is a clear, compelling and competitive advantage that we have.
I started like I said in 1991. If you look at 12 o'clock on the screen, client consulting, that's what we had. There were 50 people at FactSet. I was one of 8 consultants. There was no training manual.
There was a chair and a phone. The phone rang, you answered it. That was client consulting then. Almost 30 years of evolution in terms of our product and our service and now we have implementation, integration, CTS implementation and support, CDI client data integration teams bringing that data into our systems, right, training development and a whole host of specialty consultants, RMS and Partners Analytics Consultants. It's a testament to our commitment to our clients that over 2 thirds of our client facing staff is focused each and every day on unlocking the potential and capabilities of FactSet on behalf of our clients.
Let's talk about the regions a little bit. As you look through these slides, the way you should interpret them is client type and product service are in rank order in terms of their prominence in that region. We don't have any figures there. But if you look at those are the client types that we serve and the products that they consume in their respective order. Another thing that you will see across the majority of the slides for each region predominantly in Americas and EMEA, certainly in APAC, as we talk about the consolidation and the cost pressure, the total cost of ownership that our clients are feeling.
I bring it up because we talk about on the earnings calls, it comes up cancellations, okay? The great majority of our cancellations when they come, they're in this area. Do we lose to competitors? Yes. The minority of the time, the majority of the cancels come from here.
We win more than we lose with competitors. Where our cancellations are occurring and where you see them is in this consolidation, okay? It's a macro event, we all see it. It's Aberdeen Standard Life, it's Aberdeen, the Scottish Widows, it's a Mundy, it's Pioneer, it's State Street and GE Asset, it's Eaton Vance and Calvert, it's RS Investments and Victory. We all know, right?
That's what's out there in the marketplace. That's what we're seeing, right? So that's what that is, right? We also will see it as we've been proactive with our largest accounts largely on the sell side, working to renegotiate large global deals for 3 to 5 years. So that's what you're seeing.
Let's talk about the Americas. It's our largest most mature market. It's growing around 5%. It's homogeneous in terms of the culture and language, etcetera, completely the contrast or antithesis to EMEA, right? It gives us scale and efficiencies delivering our product.
That said, the headline here is we believe there's tremendous opportunity that still exists in the Americas in our fixed income and our risk over facts at OEMS which you heard John Adams talk about and really in our research management solutions and the partner suite. EMEA, so again the consolidation theme and cost pressure we see there. Again, you can look at some of the orders wealth management and sovereigns that jumps up, you'll see that happen in Asia Pac as well relative to the U. S. Where broker dealers were number 2, okay.
So those are some of the nuances you might see. Obviously, Europe is characterized by it's more multicultural, multi language. It's harder for us to scale visavis relative to the U. S, okay. It's a more heightened regulatory posture with MiFID II, Solvency II, ECG is probably the next one on the plate.
Brexit is still a fog that exists. We saw some our new hires and our new hires classes that come in from the sell side each summer. We saw more of those come out of the U. S. In the last year as opposed to London.
That said, we're well positioned in the sub regions of Germany, Benelux, Ireland, if any of the asset managers trans out. So Brexit, it's just creating a confusion and fog within our clients, but we're well positioned to handle that. Again, the headline in Europe is multi asset class. We've had great success in a lot of point displacements. It's necessary in that region.
We continue to see the promise of leveraging our multi asset class position in terms of unifying and bringing the front office and middle office together with OEMs, PA, PMP, which is the portfolio management platform that John Adam talked about and our workstation in and of itself. That's where we see the opportunity in there. Again, wealth and sovereign funds, you'll see that as well. Last, APAC, it's a fragmented marketplace. It's characterized by more larger domestic or insular markets, Australia, Japan, China, Korea, okay.
We serve them well. We continue to grow. We opened an office in Singapore. We're going to continue to grow and expand in China. You're going to see our footprint continue to grow in that region.
It is our largest and fastest growing region, okay, and there's tremendous opportunity that sits there, both wealth and sovereign funds as well. And what we're seeing and here's the tagline here, these large domestic markets, while we've done well on them, they are moving global. They have a need for multi asset class. They have a need for global content. That gels very well into our value proposition.
And that's an area where we can continue to work and drive success. We are either going to do that directly or we can do that through partnerships like we forged with Quick in Japan
when we talk about the portfolio lifecycle. And John Adam, who leads our Portfolio Management and Trading business, he's going to talk to you today about all of the advances that we have in integrating Portware and Simba into the FactSet platform to develop new capabilities for the front office. And for me, that's one of the key things that I think is really going to open up more opportunity at our largest clients and more opportunity for us in the front office. What I don't want to get lost today is the importance of the FactSet workstation and the FactSet web product. We have 90,000 users of our product.
We estimate there's 1,000,000 screens out there for us to capture. You're going to hear about some of the new innovative things we're doing that are driving growth. But that footprint we have of the FactSet workstation, which we continue to invest in, is very important. And we're placing a lot of emphasis on making sure we're defining the next generation of that and we're integrating more and more content into that area. The second way we're going to win is by being an open platform.
So FactSet has always been flexible. We've provided custom workflows for our clients. And by being open and flexible, we think that's a real differentiator versus our competitors. We're not a closed system. We're going to be focused on delivering value to our clients in the way that they want to consume it.
So it could
be a workstation. It could be our web product. It could be an API. It could
be a data feed. It could be with us working with a third party on a custom solution for a client. But we're really agnostic to how we deliver value to the clients. And we do think that also is a differentiator. The third way that we're going to win is with content.
Content really is king. You need content in our industry to make good decisions and to be efficient. And today, you're going to hear about the next generation of content on FactSet. We have built up a great community of users of our product. We have the best integrated set of content in the marketplace.
And we think we can really leverage the ecosystem and the community that we've built to drive revenue and drive growth within our company. Many of you have waited 10 years for more granularity and data around these areas. In the grand finale, Maurizio will be talking about some of these areas and providing you some of the detail that you've been waiting for. So I think a few hours is not long to wait relative to the decade that many of you have waited for that. And of course, FactSet has always been committed to returning value to our shareholders.
Over the last 5 years, we've returned almost $2,000,000,000 in dividends and share repurchases to the investment community. And FactSet really is a great investment for long term investors. We've been one of the most steady and consistent performers in terms of delivering earnings and revenue growth to the market since we've been a public company. There are very few companies that have done it quarter over quarter over quarter like FactSet has. We have a great product.
We have great service. These are award winning products and an award winning service model that really believe that we really believe gives us a differentiating advantage in a tough market, but we do think that versus our competitors, we're the most agile and nimble company within our space and the one that can really execute on the opportunity that's out there. And last but not least, we have a great management team. So today you're going to hear from a combination of facts at Veterans. About half the people that you'll hear from today, like myself, sat on the FactSet helped us, supported clients, sold our product, really understand what our clients do every day and care deeply about solving problems for clients and our relationships with them.
You're also going to hear from some leaders that joined us through acquisitions. Many of the acquisitions we've done have been tuck in acquisitions. They've been strategic, and we've been fortunate enough to retain a lot of the talent from those acquisitions. And lastly, you're going to hear from Gene Fernandez, who just joined us recently from the outside
from one of our largest clients. So I'm
very proud of the team we have. I'm and we really thank you for coming today. And I will see you and we really thank you for coming today. And I will see you later for Q and A. So I'm going to now hand it off to Jean Fernandez, who's going to talk to you about technology.
Thank you.
Good morning, everyone. So I'm celebrating my 5th month here. And what I thought I would do is give you a little bit about my background, what brought me to FactSet and some of the focus areas and opportunities that I think we have. So at my core, I'm an engineer and I'm still very hands on. So over the summer to try to inspire my son to pursuing technology, he and I wrote a distributed trading server that focuses on options and is completely automated end to end.
So together, we wanted to go on a journey of learning some new languages, new techniques and new platforms. Over the last 20 years, I spent my time on a number of different firms. So I was at Merrill Lynch, Credit Suisse and most recently JP Morgan. And in that time, I did a lot. I headed up Investment Banking Technology over at Merrill Lynch, worked with BuySides and Prime Services at Credit Suisse.
And at JPMorgan did a bunch of things, built the client facing platforms for the firm for the institutional side, so JPMorgan markets. And most recently, over the last 3 years, headed up a group called Emerging Technology. And this was a group of engineers kind of formed to look at those technologies that we thought could inform the future business models for JPMorgan. So during my time, I think I've run into FactSet a couple of times. Probably the first time was 17 years ago.
So I've been a fairly big client to not only FactSet, but all the competitors in the space. And because these were clients of scale, had the unique opportunity to deal with these firms top to bottom and very broad and
pair up
with large dominant players or again just work directly using our own capabilities and our own footprint. So those are our regions. In closing, some of the younger generation like these word clouds and they were talking to me when I go out and mingle with the sales force and I talk to our client solutions team And they were talking about these word clouds and the way that they wanted to demonstrate like who and what we are and they challenged me to say what is FactSet to you, John? What do you think about FactSet? What do you think about FactSet sales and where do you think our future is?
Do it in a word cloud. They didn't think I could. I'll let you guys see if I did it. This is my view. At the end, we're an analytics company, that's not necessarily the analytics workflow, but we're analysts, we're analytical.
We like to get deep into the details, okay? We're a technology company, 1st and foremost, those are our origins. We were a software company. We continue to be 1, all right? And we're applying our technology to everything that we do.
Content, you heard about that. Services and people, I'm going to juxtapose those a little bit. Services is more not how Phil calls it in our 4th pillar. Services to me is an area where we're going to continue to grow. It's our professional services business as we talk about enterprise selling and where we need to go and meet our clients' demands and needs and look out beyond the horizon.
We're going to have to enhance our implementation, integration and support teams. When we're delivering enterprise solutions, we need to be more turnkey or white glove as you heard from Lauren. Okay. So services, I mean in that, people is about our client service, people is about our clients, people is about the relationships that we create. We are not a transactional based company, we are not a transactional based sale.
Anything and everything about us in our history is about people. Our people is our greatest asset and our clients and that relationship we have with them. Quite frankly, if you wanted to get mad at me and say I should have put people right in the middle, I probably should have. It deserves as much prominent and weight as analytics. But really that's what I see.
The other areas, I guess as I learned from word clouds, it's supposedly the smaller words might mean that they're less important. I don't think so. I think they're just they go around the ecosystem. If our anchors or pillars our services, people, analytics, our capabilities, that's something I love to talk about, our capabilities because it's a little bit more encompassing the products and services and our people. It's the capabilities that we bring to bear and how we partner with clients and extend and enhance their capabilities with ours and that's where 1 plus 1 equals 3.
Workflows, feeds, APIs, artificial intelligence, all those things are important and they enhance our analytical capabilities, they enhance our technology or they enhance the services that we bring. So that's my attempt at a word cloud for the younger generation and that's my belief in FactSet and who we are and the opportunity that sits in front of us. With that, I thank you for your time and attention. There will be a break now for 15 minutes. And when we come back, you'll hear from our CFO, Mauricio Niccoli.
Thank you very much.
Ladies and gentlemen, we will begin in 5 minutes.
Broad exposure to products and their capabilities in engineering. And the thing that always resonated about FactSet is their client service. So they were willing to tailor their products to what the client needs were. So it didn't feel like a product push. It felt like a solution for clients.
And during that time, over the last 17 years, what was interesting is FactSet reinvented itself a couple of times. And the current state of the environment, the market, I think, is requiring clients to now change. So I think the industry is now at a new inflection point. I think there's currently gaps in product offerings, and there's new pressures. So if I think about the regulatory environment, if I think about the cost of security, the cost pressure on both sell side and buy side has gone up dramatically.
And with the change in regulatory environment, the transparency has increased such that there's now top line pressure for our clients. And so clients are in this feverish race to massively automate their infrastructures and look at how do we do trading, how do we do sales, how do we do all core business processes through technology. And so potentially, the client of the future for FactSet and for its competitors are going to be sometimes humans, sometimes machines. And what's interesting and exciting about that is that the machines can consume data 100 times, sometimes 1000 times, as much as humans can. And so there's an opportunity for actually the need for data, the need for analytics to go up.
And the opportunity that we have is to build a platform that can support that and that can respond to the clients of the future. Many of the competitors, their entire business is architected to a human endpoint. And FactSet is open to supplying both. And that's what's brought me here is that there's this inflection point and we have the startup mentality, but with sufficient infrastructure and scale to actually deliver. And that's where FactSet, I think, is very uniquely positioned.
The sell side and buy side is going through this transformation, and we can support that transformation. And I know, having been a client, that there are very specific gaps in offerings. And FactSet is kind of uniquely positioned to fill those gaps. As I think about emerging technology, we looked at
Ladies and gentlemen, please welcome to the stage Maurizio Nicolelli.
Okay. Why don't we get started? Welcome, everyone. Welcome to Investor Day. Good morning to everyone.
So we're going to start the financial update and I was going to cover 3 areas today or actually 4 areas, I should say. One is, I'm going to take a look at where we've been over the last 5 years. I'm going to take a look at also our short and medium term goals. I'm going to review the slide that everyone's been waiting for to see how we break up the $1,300,000,000 in ASV. And then we're going to talk about capital allocation, kind of the way Phil and I think about how we allocate our capital overall.
So the first slide here is a slide that I use when I talk to employees at various company meetings. I always want to reinforce where we have been because it really shows how well we've executed over the years and also how well we've done as our employees work very hard in terms of building up the growth in FactSet. If you look at our last 5 years, ASV has grown 57% over the last 5 years as of the end of February. That's half that's $500,000,000 in ASV growth over that period.
Dollars 370,000,000 of that is organic. So a couple of very relevant areas. And so we started out with blockchain technology. And that technology is potentially going to be to transactions what the Internet was to information. And so there's a tremendous opportunity.
And there's an opportunity for us to leverage that to deliver services in a unique way. Cognitive Computing, artificial intelligence is another very interesting technology. And there's so much hype, big companies, small companies that are trying to deliver product. And while I was at JPMorgan, we looked at 14,000 different startups, many of which had some cognitive angle. And what we found is that many of these companies, while they had good technology, they struggled to train their machines because they didn't have the data.
At FactSet, we can come at it from a different direction. We have the data. We can overlay the technology. And we can deliver a product that doesn't yet exist. At JPMorgan, we also looked at the public cloud and what we could do with the public cloud.
Could we run the bank on the public cloud? And there's an opportunity there for us to engage clients in a way that hasn't been done before, almost giving us infinite scale regardless of where clients are and what workflows they're doing. So my focus areas are threefold. So first, we have some infrastructure, legacy infrastructure that we're going to aggressively upgrade this year. So by the end of this year, NextGen, which is a project that has is looking to eliminate our centralized infrastructure and make it more of a distributed infrastructure will be code complete by year end.
Next year, we're looking to have all clients migrate to new platforms. So effectively, we'll be out of this legacy infrastructure, which will give us an enabling platform to deliver some of these new products. Developer efficiency, I think we've got an opportunity there to automate a lot of what developers do today and give us capacity in our development group without changing the cost profile. So that's a very exciting space. And then finally, and this is what's near and dear to my heart, is using these emerging technologies to create products that don't exist today, that are going to be the drivers of this industry in the future.
And as a client, we've envisioned a lot of these products. We've tried to build some of them ourselves. But FactSet, with its data, with its analytics and engineering capacity, is kind of uniquely positioned to drive this. So expect over the next, call it, 12 to 18 months
to see Overall, ASV's group grown 57%. The $370,000,000 equals 43% growth organically over that period, which really shows how well we've executed over that 5 year period. If you look at adjusted EPS, adjusted EPS is up over 80% during that period on a last 12 month basis. And so how did we get there? 1, through organic ASV growth that we just talked about.
2, is really leveraging our acquisitions over the past 5 years and we've done 9 acquisitions over that 5 year period. 3 is really maximizing our effective tax rate. So if you look at our effective tax rate 5 years ago, it was over 30%. Now, our effective tax rate is below 20%. So, a significant change there.
And then 4, the 4th item that's really driven our adjusted EPS is our share repurchase program. We have spent over $1,400,000,000 over the last 5 years in repurchasing over 10,000,000 shares during that period, which has really helped to drive adjusted EPS growth. And what that all translates into is our share price doubling over the last 5 years. If we look at our short term goals or short term guidance, we came out with annual guidance back in December, which we really wanted the investment community to start thinking about FactSet in terms of guidance on an annual basis. Our quarters are choppy.
If you looked at the Q1, it was a very choppy quarter, but the business rebounded and did very well in the 2nd quarter. So there are really we want everyone to really focus on annualized numbers. If you look at our annual guidance as of the end of December, we made some adjustments to it over in the past quarter. Our key metrics, ASV growth and also revenues and our adjusted operating margin were unchanged from what we guided to as of the end of December for the full fiscal year. We did have a number of one time items both above the line and below also positively benefited from the tax reform in terms of our effective tax rate during the period.
And then also we positively impacted our adjusted EPS up because of the tax reform that came through. If we look at our first quarter or first half results and we look at the midpoint of our guidance, we're very confident that we are in very good shape to at minimum meet the middle of our guidance. And if we look at the kind of the 3 key metrics for us, this is where we get our confidence from. The first one is ASV growth. We did $27,000,000 in ASV growth organically in the first half of the year.
If our midpoint of our guidance is $75,000,000 remember our guidance was $65,000,000 to 85,000,000 dollars in ASV growth for the fiscal year. Dollars 47,000,000 is right in line with very similar to what we did Last year, we did $42,000,000 in ASV growth in the second half. So that gives us a lot of confidence that we can meet at minimum the middle of our guidance during the second half of the year. Adjusted operating margin was 31.6% in the first half of this fiscal year. If we continue to go to perform at 31.7%, we will hit the middle of our guidance, which we're very confident in terms of meeting that middle of the guidance of that metric.
And then adjusted EPS, we did $4.15 in the first half of the year. In order to meet the guidance or middle of our guidance, we need to do another $4.30 in the second half of the year. Keep in mind, we did $2.12 in the second quarter. So just doubling that number in the second half gives us a lot of confidence that we will meet at minimum the middle of our guidance that we published. All right.
So this is the slide that everyone has been waiting for. $1,300,000,000 in ASV as of the end of August in 2017. $456,000,000 of that is our analytics suite of products, which is slightly more than a third of our overall ASV. And as of the end of February, our analytics suite was growing at 6.7% and that was really driven by all of our from PA, performance, risk, all of our core analytics suite of products. If we look at CTS, CTS is almost 10% of our business at 124,000,000.
Dollars It is our fastest growth area in terms of our workflow solutions within the business. It's growing at 20% plus currently for the overall business. If we look at wealth, wealth is at $130,000,000 of the overall 1.3 $1,000,000,000 and that is growing at almost 8% on a year over year basis at the end of February. And keep in mind, wealth also incorporates FDSG. So FDSG is about half the number.
And if you go back to when we purchased FDSG back in April of last year, it was $63,000,000 that we added in ASV from that purchase and that's incorporated in the 130,000,000 dollars The other piece of the 130,000,000 is really our wealth sales
to the
higher end of the wealth market. And then the last piece here is $607,000,000 is our combination of research and portfolio management and trading solutions. And that incorporates about just slightly less than 50% of the overall ASV and that is the piece that's growing around 1% on a year over year basis. And that really incorporates our banking business, portfolio management solutions areas, it includes our trading solutions, Fortwear. That's growing at 1% right now and that's really the area that's facing a lot of the headwinds in the industry that everyone talks about currently within our industry.
And that's the area that's the slowest growth for us currently today. These metrics are this is the breakdown of ASV as of August 31, 2017. We will update this as of the end of August 31, 2018. So we'll be providing this breakdown on an annualized basis. And again, the reason we're doing that is because it's very choppy on a quarterly basis.
And so the next time we will update this will be at the end of August of this fiscal year. And same with the growth rates, we'll also update those growth rates at that same time. If we look at our medium term goals, going forward and when we Phil and I think about medium term goals, we think about the next 2 fiscal years. So when we talk about medium term goals here, we're thinking about fiscal 2019 and fiscal 2020. When we think about organic ASV, we look at organic ASV as growing in the mid single digit area in terms of growth rates.
And that's very similar to where we are today. But I think when we look at that, Phil and I have taken a bit of a conservative approach to ASV growth. There's a lot of product that's coming to market and we do believe that there's additional growth there that could accelerate us further than from mid single digit growth going forward. Adjusted operating margins, we do believe that we can increase our adjusted operating margin by 100 basis points per year for the next 2 fiscal years. So that's really bringing us from around 31.6% to right around 33.5% by the end of fiscal 2020.
Our margin, we did invest a bit more this most recent quarter and you did see our margin come down to like the mid-thirty 1.5% range in the most recent quarter. But the key one thing to keep in mind is that there we do believe that there's leverage in this business. And how do we get there? We get there from organic ASV growth and we get there also by leveraging our existing acquisitions to bring up their margins going forward and also through automation a lot of what Gene talked about within his presentation, we should start to reap those benefits going forward. And the last item here is adjusted EPS.
We have always thought of FactSet being a low double digit growth EPS company, whereby we are consistently performing or growing adjusted EPS in the low double digit growth area. And how do we get there? We get there from a lot of what I just talked about in terms of organic ASV, leveraging our margin to increasing it 100 basis points per year for the next 2 fiscal years. It's also through maximizing our effective tax rate. Keep in mind, our effective tax rate, the benefit we got this year is 812ths of the benefit because the tax reform bill started January 1, so we get 812ths of that benefit.
In fiscal 2019, we will get the full benefit from maximizing our tax benefit from the tax reform bill. And then also from share repurchases. If you noticed in our last press release, we increased our share repurchase program by another 300,000,000 dollars bringing the total to $431,000,000 being available for repurchases and it's our goal to spend between $325,000,000 $375,000,000 in share repurchases over the next 12 months. And that's a $100,000,000 uptick and it's really the result of being able to repatriate $100,000,000 from overseas cash that was sitting overseas that we can bring back to the U. S.
And the biggest value that we get today in terms of that cash would be to from repurchasing shares during that period. Let's take a look at capital allocation. And when we think about capital allocation, we still remain very disciplined and we still look at capital allocation the way we have looked at it in the past. Keep in mind, the most recent quarter we generated $315,000,000 in free cash flow. That's the highest amount of free cash flow we've generated over the last 12 months in any period in FactSet's history.
We still have $575,000,000 in debt on our balance sheet at a cost of capital of slightly less than 300 basis points. So our cost of capital is still very low. So there's still plenty of opportunity to use our existing cash flow for a number of different areas to maximize our shareholder value. So when we think about capital allocation, there's really 4 buckets. 1 is business investments.
And there's really 2 areas where we allocate our capital to. One is to grow top line growth. That's where we go through our investment process during the middle of every year, usually in late spring. And we really look at where are the areas that we're going to invest for the next 12 months. And that's really that investment for the next 12 months really is top line growth, not just for the next 12 months, but really for the years thereafter.
And what are some of those areas? And there's a lot of those areas we've already touched on today. It's analytics APIs. It is FactSet OEMS. It is another example is FactSet Open Marketplace.
Like those are the areas that are just examples of areas that we are investing in to really drive top line growth. Then there's also investment in the core infrastructure. By adding $500,000,000 in ASV over the last 5 years, the company is transforming itself every 5 years and becoming that much larger and we have to make investments internally. So an example of that would be the implementation of Salesforce as our CRM for the whole company globally. Acquisitions.
Acquisitions, we still remain very opportunistic in terms of looking at companies. We are in a very nice spot in that anything that comes to market in our industry comes in front of us now given our size. We're still very opportunistic in terms of acquisitions. It's really to drive top line growth and it's really focused around content and technology. And those are really there's a number of different areas that we think about, but those are really the 2 pillars that we think about when we look at M and A opportunities.
Dividends. Dividends have been very consistent over the years. If you look at our dividend increase as of the end of May of 2017, we increased our dividend by 12%. If you look at our CAGR over the last 5 years, dividends have increased 13% over that time period. So our dividend policy and plan has been very consistent over the years.
And then the last area is really share repurchases. If our cost of capital see a lot of updates in this space and how these products are taking form.
So this is what's brought me to FactSet. This is why I'm excited about the investment in FactSet. And I look forward to the journey. So some of what you're going to hear today is Rob Roby start to talk about analytics and some of these product areas. And you'll also hear for Richard Newman, who's also going to talk about a new approach with Open FactSet.
Our next speaker is going to be John Adam.
Thanks, Jim. Good morning, everyone. Thanks for joining us today. My name is John Adam. I lead the Portfolio Management and Trading business for FactSet.
And I'm really excited to tell you about everything that we're building today. First, a little bit about me. I started my technology career as a middleware provider, integrating different systems for Neon and moved into brokerage and trading with 10 years at LiquidNet before moving on to Portware, which is an execution management system company. And what excited me about the opportunity at Portware was really a revolution had taken place in buy side trading and portfolio management over the last 20 years, right? The technology that's available is incredible.
That was the first time I heard that Gene spent the summer building a trading server with his son. Certainly makes me rethink how impressive it was that I helped my son build the LEGO Death Star. I thought new bar for what I'm going to do with my next summer. But really, what's been happening in the trading and the portfolio management space is nothing short of revolutionary. The systems are all interconnected in such a way that there's both tremendous challenge from fragmentation and tremendous value.
When I was at LiquidNet, I had the privilege and misfortune of working with approximately 20 different order and execution management systems and hooking them up to that dark pool. And everyone was different, every single one was a silo, everyone had their own unique workflow that we had to tailor it to get everything to sameness, to get to like to like, so we could take a big block equity order to buy and match it with a big block equity order to sell. And in doing that, right, seeing the challenge also when FactSet acquired Portware, I saw the opportunity in it where you can take a great technology platform and marry it with a company that is incredible at concording different data sets at getting different pieces of this financial ecosystem to talk, then you really have an opportunity. But let me first talk about that revolution that's happened over the last 20 years or so. So going back to the '80s '90s, the automation in which the New York Stock Exchange was a leader didn't really touch the buy side yet.
They were automating their own systems and the brokers really automating the trading that they were doing broker to broker on the exchange. So the first piece of technology that really caught on like wildfire amongst the buy side was the order management system, right?
Getting the order from the portfolio manager through compliance and into the traders' head. So low on our debt and there's not a significant acquisition coming towards us or that we're looking at. Really, we have a significant amount of cash flow that the business is generating and the best area for us to invest in is for shareholder return is really share repurchases. And that was evident in the last press release that we issued and that we increased our share repurchase program fairly significantly from what we've done in the past because it really is at the end of the day very accretive to overall shareholder value. So just in closing, just a few things to think about.
We believe we've been very successful in each of these areas. We've you've heard throughout the day, what makes FactSet a great company, what makes us different and also why we win. There's plenty of investment opportunities out there for investment professionals, but we do believe that we have successfully hit a number of all of these areas and that makes us a very good investment going forward. We want to thank you for being a shareholder and also thank you for considering FactSet as an investment. I think now we're going to bring Rima back up to the podium and we're going to take Q and A.
All right, people. So we're going to get started with questions and answers. I've got some mic runners. I see some hands going up in the air. Just give me a minute.
When the mic runner comes up to you, please say your first and last name and where you're from. It would help the people on the webcast. So we'll go to that one first, Lauren. Thank you.
Hi. It's Peter Appert from Piper Jaffray. So a couple of questions on the pricing environment, Phil. Obviously, it's a very competitive environment. You've highlighted this.
This is the pricing environment. I'm just wondering if you have any new or updated thoughts in terms of changes you're seeing in the marketplace, how you address and deal with these pressures? And then specifically, one of your competitors been talking about a move from seat based pricing to enterprise based pricing. I'm wondering if that's something that's relevant from your perspective.
So I'll answer it this way. So it is competitive out there. It continues to be more so. And when we go to market with our workflow solutions, we have a great product suite, which you saw on display today. There's more that we have, but you saw a good portion of what we have.
I think when we're going into our larger clients to upsell them, we're really talking about everything that they have from other competitors as well as what it is they're building themselves. And we're our approach to enterprise selling is really to go through that process with the client. They want to partner with us, they trust us, and just coming up with a value proposition that works well for the client.
How about today versus 6 months ago or 12 months ago in terms of the environment?
Yes, I don't think it's changed that significantly. I would say over the last number of years, we've been operating in a similar pricing environment.
Toni Kaplan from Morgan Stanley. I wanted to ask about the index business. I wanted to see what you think the total opportunity there is for you. Do you think of yourselves as disruptors in the index business? Would you look to do acquisitions there?
And like basically, is that the biggest driver of the analytics revenue as well? Thanks.
It's a new sort of niche area for us honestly, Tony. Not an area that historically we've thought about investing a lot of money in to compete with the other index providers that are out there. But where we are seeing success is with the alternative data sets that we have and providing those to people that are creating indexes or ETFs and being kind of the engine behind that. So I think that's where we see our role today. We see ourselves as pretty Swiss in that regard when it comes to indexes and just doing the best job we can to integrate everything that's out there for our clients and then pump it through either our platform or directly into their platform.
So that's it's a very small piece of the analytics business today.
It's Manav Patnaik with Barclays. So just a question on the margins, right? Historically, you'd almost talked about keeping margins flat. It sounds like you're spending in CRM, you're spending on a lot of these new products. And the FX has turned a negative as well and you're still guiding to 200 basis point margin expansion.
So I was just hoping you could elaborate a little bit more on where that leverage has suddenly changed?
I think the when you look at our margin and the opportunity there, it's we're not done leveraging acquisitions going forward. And we were very successful with the Porwer acquisition, And we have some very a number of goals that we want to get to for both FESG and Viasand. So that is an opportunity for us. I think a lot of what Gene went through in terms of automation is going to be significant for us because what that translates into is a reduced amount of headcount going forward to a certain extent. I think those are really 2 big areas and it's leveraging our workforce and getting the right balance between having employees in the U.
S. And Europe and having employees in a lower cost area.
So maybe just on the automation part, maybe I read the initiatives on all the technologies as early stages. It sounds like it could be much quicker than that because I guess your guidance was next 2 years, right? I thought maybe you'd start seeing a lot of
the benefits only sort of in year 2 or so.
Yes, I think it's a steady approach for the next 2 fiscal years. I don't think there's a big bang to increasing margins, but I do believe there's steady progression over the next 2 fiscal years. And that's why I termed it as medium term, not long term because we're really thinking about just the next 2 fiscal years right now.
Alex Kramm, UBS. Maybe this is a question that ties into the margin, maybe it's something for John. But just wanted to come back to the Client Solutions Group, I mean, 1,000 people you said. And I looked at some of the numbers like 20,000 queries a month, 42,000 visits a year. Those sound impressive.
But then I did the math and I was like, wait, that's like a little bit more than 1 credit repair client solution person a month and less than one visit a week. Maybe I got those numbers wrong, but it seems like and I know you're proud of it, it's a very big organization. So is that part of the margin question too? Do you think there is just too much service out there? Or why am I understanding the numbers wrong?
Do you want to answer that one, John?
In the Global Client Solutions area, right. Those aren't all what we call client support or client user support who are actually taking the inbound question. So you really got take that down to a lower number, right. There's a great number of those are doing implementation, integration, they're the analyst consultants, they're not taking the inbound queries, etcetera. So 1,000 is the wrong number, 1,000 is the right number for what the population is, but it's not the population that's actually taking what we call client user support those calls.
So it's the right size?
Yes, and there's an evolution there. So I think there are things that took a long time to kind of help clients with previously that we can automate and much make easier for them. But our solution is becoming more complex. So at the high end, we need to, I think, kind of stretch out the capabilities that we have in that group. So I think there may be some room in sales, but I think in the short term, no more than the rest of the organization.
Joe Foresi from Cantor. Thanks for the four business lines, but I had a couple two questions on it. First, are those 4 set business lines or do you feel like there could be some movement around the definitions or other business lines could develop over time? And secondly, since you gave us growth rates in percentages of revenues, any idea on what your expectations are for those growth rates in going forward?
Maybe I can provide a little bit color on the business lines. So what you didn't see there was workstation broken out. So 4 of the business lines have workstation in them for the different types of users that are relevant for that particular workflow. The one that obviously doesn't have it is the CTS business, which is more off platform. So I do think that those groups are going to go through a little bit of an evolution in terms of the product suites that are in there.
And one of the things that makes FactSet fun is problem solving. And we are a pretty heavily matrixed organization. There's a lot of shared components and shared content that go across these businesses, which is frankly why it's taken us a little bit of time to get you the numbers that you asked for. So we think we've done a good job of that measuring it internally and breaking it out. In terms of the future looking growth numbers, I don't think we're going to kind of provide that today as you probably expected when you asked the question.
Keith Howes from Northcoast Research. I appreciate the color you guys gave us there. The trading platform
is buried within the research. I guess, is there a logical why they're buried together? And perhaps can you provide any color in terms of how trading is performing compared to the rest of that Research segment?
So trading is still performing well since the acquisition, and it's growing at a faster rate than the rest of the company. We're not going to break out the exact number. But yes, you're right, it makes sense to put those groups together. It's a lot of the front office professionals that FactSet has today. A lot of our workstation business is in that group.
The other group that has a large number of workstations is the wealth business.
Glenn Greene from Oppenheimer. I just want to go to back Yes.
So that they could pick up the phone and call their broker. Didn't do a lot once it left the 4 walls because it was a phone based trading relationship. So there is a need for a different system. Now these brokers, many of them being innovators and disruptors, had built these systems for themselves to trade. So why don't I push that system to my client?
So Ready, MS Passport, InstaQuote, start to come to market and guess what, they worked great. And now the buy side has a new problem, which is that every broker they have a trading relationship with wants to have their system on their desktop. Now for the first 2 or 3 or 4 or 5, maybe as a trader, I can handle that. But 10, 20, that just becomes an unmanageable mess and different systems for each asset class too. So there became a need for multi broker EMSs that were hosted, Realtek, ITG's Triton product, Trading Screen, so I can now aggregate all of my brokers and all of my electronic trading into one system.
But it still didn't do one thing. And the one thing it didn't do is that the traders still had to click the button. And that's fine if I've got a slow day if you as analysts aren't that active and I've maybe got 10 buys or sells to do. But what about when there's 2,000? What about when there's 3,000?
What about when a tweet can spike the volume of the New York Stock Exchange beyond what we've ever seen it before? Now that's a lot of button clicks and my finger is going to get tired and there's also an opportunity for automation. So FlexTrade and Portware were 2 of the first systems to do that, But the automation what that means is we start to move into a world where the trader can intervene by exception, but the machine is handling most of the trading for the trader, which is tremendous value to funds that are concerned about expense ratios, their workflows to simply managing the amount of information they have, because one of the most precious assets that an institutional asset manager or a hedge fund has is that experienced traders' attention budget. And later on at the end of this presentation, we're going to show you a demo of the power of concording all of this information and applying a layer of intelligent automation on top of it. Portware was one of the first systems to use artificial intelligence and machine learning to drive trading.
But the system, as good as it was prior to the acquisition by FactSet, was an empty container. Every time we built and installed a new instance of Portware, we had to go and get the data from someone else. We had to get the security master from someone else. We had to get all the analytics we use from somewhere else. And we did that quite well as a business.
But in terms of scalability, in terms of really positioning it for the future, the power of portware is multiplied and is exponential on top of the workstation business that FactSet has already built for the PMs and traders and connecting those two worlds. So now the EMS is much more populated and functionally rich and it's able to talk to the entire ecosystems of products And that's what we're going to show you at the end of this presentation today. So Portware and Simba, the order management system company we've acquired have come together in the Portfolio Management and Trading Solutions business to combine really what's at the core of the portfolio lifecycle that Phil was talking about. So whether it's by building through our workstation, whether it's moving to workflows that are unique to that institutional asset manager, we have the ability to provide a holistic solution that was built from the very beginning and designed from the very beginning to be an open platform, designed with the API in mind, designed in such a way that we know that each of our clients has a unique workflow and we need to support that workflow with an open and scalable platform.
It's a big market. The buy side spends a fair bit of money on this. The last time Grenis Associates did their survey on trading technology spend, dollars 4,800,000,000 in 2015, and that number, it's significant. And of that, an additional $1,100,000,000 23% pays for the order management systems alone. Why?
Because they're the lifeblood of the buy side. In order to compete in this market, asset managers and hedge funds need great technology to again preserve the attention budget of their portfolio managers and traders. We don't want them doing repetitive tasks that a machine can do for them. We want their data sets to concord. We want their workflow to not have breakpoints in it where I've got to dump all the information out of the system I'm modeling in to bloat it up into my risk model and look there, dump it out again, put it into my order management system, oops, I missed the compliance rule.
Now I've got to do the whole process again. So oftentimes what happens, this is an actual composite. It's just this easy to trade in the with for an institutional asset manager today. So this is a composite of what many of the information technology landscapes we come into look like, where there are custom workflows because many of the systems that Institutional Asset Managers are dealing with were never designed to operate in the ecosystem. They were designed to operate in a silo.
So all of these moments of complexity that they see where there's a break in the system, what it results in is a manual process, right, where I have to manually export data out of one system loaded up into another one. And every time I do that, I run the risk of a critical piece of information dropping. To give you a very common scenario, often times the system that a portfolio manager is working in and generates an order in doesn't allow them to give specific instructions to the trading desk. So what does the trader have to do? The trader has to stop what they're doing, move away from their EMS, pick up the phone, call it portfolio manager or I'm them, hey, what did you mean?
I understand that your order says market on close, but did you really mean that or do you want me to go slow? Do you want me to go fast? So all of these little nuances, the technology needs to be smart enough to understand them, right? Otherwise, we're moving to a manual process that is slowing these vital human assets down. They're working with incomplete information.
It's not enough to have a 24 hour batch upload for information anymore. We need to move our products to real time. Everything I'm going to show you in the demo is going to show you the power of those real time updates between the different systems and how much more value is derived in the portfolio life cycle when the components are automated and open. Now one traditional solution to this has been one size fits none. So the answer oftentimes is if you buy everything from 1 vendor, everything, so from risk, portfolio compliance, all of those pieces in a static system, they all concord because they were built by 1 vendor.
But oftentimes what happens is the buy side is losing uniqueness and they're losing capability because they're being shoehorned into a particular workflow that doesn't work for them.
The mid single digit ASV growth, I guess I was a little surprised that the key conservatism given the business mix presumably is moving toward the better, meaning you're now less than 50% of your ASV is kind of growing at that 1% so. And given the answer to the last question, research sounds like it's probably declining and PMT is growing at a pretty good clip. So you've got to get more of the business growing at a clip. Is it further deeper pressure on the research part of the business or the core inherent legacy workstation business? Or is it just trying to rationalize why the growth is somewhat slower?
And you had talked about getting back to high single digit and obviously you're taking that parameter off the table for the next couple of years? Yes.
So a couple of things. One is, as Maurizio mentioned, we're seeing the most pressure that we see when we talk about active to passive is in the front office and on the workstation business. And it's in there. It's not just it's research, but it's also portfolio management and trading. But we do view there as being a huge opportunity for us there in terms of further growth.
And we're just being conservative. Honestly, it's very hard for us as a group to get good visibility on what we think the growth rate is going to be even 6 months from now. So for us to accurately provide what we think of a 1 to 2 year growth rate is hard. So I think we've taken a conservative approach. What you've seen in terms of the product that we put on display today and all of the other investments we're making, we're confident that that's great product.
We can't predict whether or not the headwinds will increase or not. But I definitely think there is a strong thesis for us getting back to high single digit growth. It's just a question of timing.
So to follow-up to that would be, what would be the
key variables to drive you back to that high single digit?
So I think it's stability, right, within the seats and being able to continue to grow those. It's the continued acceleration of the CTS or off platform business. And it's not just CTS, it's really opening up our platform across all of the different groups to provide value and content. So I don't think of our off platform business anymore as just data feeds or even the data exchange. But when Rob talks about the analytics API, 5 or 10 years ago, we wouldn't really have been even thought about opening up the analytics API to clients.
We would have been afraid of it sort of cannibalizing our business. But we now realize that's not the case that clients that want it from us aren't interested in taking that to basically offset the cost of other things they have. It's just to receive the value that we provide in different ways. So I think that's a big opportunity for us. We can now unbundle the workstation.
So you may have heard us talk about FactSet views, but the way that our investment has created the platform, essentially we can take any view on FactSet and put it into a client's environment or create sort of a custom experience for them. So that's exciting as well. So I think the rapid adoption of sort of our off platform business is going to, I think, be another key component in our growth. The continued acceleration of our or growth of our analytics business, risk, that's an important one. And I think we still have some work to do in terms of filling out the content to be truly multi asset class.
That's something we continue to focus on as a company. And the Wealth business is doing fantastic. So I think the addition of IDMS, what we call FDSG to our existing wealth business, which had done really well at the high end of the market. And the work that we've done with FactSet Web really now opens up, When I talked about the total addressable market, the wealth business that some of our competitors have is now really open to us, whereas previously, it wasn't. It was a scale issue that we didn't want to tackle at a price we didn't want to tackle, but that's not true anymore.
So that's a very exciting piece of our business. And you can see that it was growing or is growing at a pretty good clip.
Just real quickly, what is at a high level the business model for Open FactSet? Is it just the data feeds or how do you get a share of a
We're still thinking about that, but there's lots of different options, right? You can have a usage based model, for example. So for the analytics API, you can charge based on the number of units or whatever that somebody is consuming for our feed business. It varies depending on the value of the content and how much of it we're sending and how many people are consuming it. So a lot of variables go into pricing off platform.
It's a more difficult equation than just providing a workstation. But it's all based on value. So we think about what is the value the client is getting, how much would it cost them to do it themselves, how much would it cost them from a competitor in getting the most value we can for that solution.
Sareh, I'll come to you next.
Thank you. Shlomo Rosenbaum from Stifel. Phil, just a question for you. I guess Maurizio also, historically, the company has not really talked a lot about margin expansion. The company is really much more focused on top line growth.
And a lot of times there is a growth margin trade off over there. You're going to invest more and you can grow faster. Could you do that? If you kept if you decided you didn't want the margin to go up 200 basis points and stuff like that, could you drive the top line faster or for the organization as it sits right now, this is just a healthy way to do it because you could throw a lot of product, but in terms of pacing the growth, the organization can't really handle it at that point.
Do you just Yes. So that's I think that is a good point. We do want to one of the things that we've been consistent on is delivering double digit EPS growth for our investors. So if we're growing in mid single digits, margin expansion is definitely something that helps us get to double digits. But I think on top of all of that, we do feel that there's a lot of efficiencies to be gained in our business.
And because we have been so centrally managed historically, and we've not had the greatest sort of business intelligence for different groups to utilize, I think there's still a lot of room to invest in high ROI products or opportunities, while gaining margin expansion. And the work that we've done internally to align ourselves and have leaders around these different businesses and put the development teams and the strategists directly in them is starting to result in what we see as some really good results in terms of making the right bets on products and sort of de investing or investing less in some things that had a lower ROI. So all of that is sort of our thesis in terms of how we think we can drive some margin expansion while continuing to put out progress at a faster rate than we have historically that can drive the top line.
Just a follow-up on just taking different tech. Can you talk a little bit more about the lower side of the market in terms of addressing what the FAs that are out there that you're you think that the market is now open. How aggressively are you going after that? And exactly how are you selling that if you talk about a lot more, because there's a lot of workstations out that way. I know it's obviously lower dollar value, but maybe you can just talk about how you're thinking about that?
Yes, I think that's a good one for John to chime in on.
I think the answer is really as we're just looking with FDSG, IDMS, talking about the products that we have with views, our move from the technology to a completely web HTML based application. Now we can deliver discrete bits, right, of that workspace. So it's not such a heavy drop, if you will. So we're able to scale the offering to meet all the different sections of that market. When you look at private client wealth and then down more to what I characterize as more retail, our ability to do that.
So the product allows us to do that and the sales force will now be aligned in that way as well. I don't know if I would use the word aggressively. We are pursuing it. We're kind of getting the product positioned properly and looking to address that marketplace. And that's still kind of integrating the sales forces from FDSG and FactSet.
But it's clearly an initiative that we're doing. There are large opportunities. The pipeline is there. I just would hesitate to lead you with the wrong impression if I use the word aggressive, I'm particular about words.
We're getting some great wins both at the low end of the market with smaller shops, but also some what's driving that growth rate is a lot of people using FactSet Wealth Workstation.
Brian Alexich from Greenwich Investment Management. A question on your competitive landscape. Thomson Reuters and Blackstone have announced this partnership. You have a competitor that had a reputation for sort of poor management or service that presumably should resolve some of the principal agency problems that they've had and be a little bit more competitive. How or can you share your high level thoughts on how this may impact your sales strategy and how that has played into all the things you shared with us today as far as margins and growth expectations?
So I think the impact is not significant over the next few years. I think there's probably a positive for us frankly and that we see that there'll be more disruption and turbulence within that particular competitor. We've been competing on or they've been competing on price with us for a long time. So for years years years, we'll go out and we will provide a better solution to our clients. Very often they will be interested in FactSet, and hey presto, the price of the competitor's product may go down by 50% or something.
And sometimes we'll win those and sometimes we'll lose them. So I don't think we'll see anything different than that honestly than we have historically. Obviously, things will change. There are different views as to why the acquisition was done and which assets will be leveraged. But it's not one that we're concerned about in the short term.
It's Kevin McVade, Deutsche Bank. Thank you again for the additional disclosures. I wonder if you can give us a sense of the margin profile at each business relative to the corporate blended average? And then as you look at those 200 basis points of expansion, what segments would you expect to contribute most as we think about the next couple of years?
Okay. So as Phil said before, we're highly matrixed. And those are not those are workflow solutions and we bucket them into ASV. But when we look at the cost, we're still highly matrixed, right? And so there's a lot of cost that is shared between all four of those groupings that we had there.
So they're not distinct separate business lines today that we measure all the way down to a margin profile. If I look at it, some may be more profitable than others. That's correct. But I don't think we're ready really to go down to that level just yet.
Yes. Thank you. Alex Kramm again, UBS. I think it's for you, Maurizio. You talked about M and A as like number 2 capital allocation.
You've been a lot more acquisitive in the last few years. So just curious how you actually measure the performance of those acquisitions. I don't think you've done that in terms of returns or IRRs, anything like that. And maybe also the criteria going forward? I mean, again, like you've become more acquisitive.
You've backed out some of the acquisition costs, moved to a different reporting. It's just very hard to measure like how good you've actually been at doing these acquisitions. So maybe a little bit more color if you have it.
Yes. So when we do an acquisition, we go through a process to really measure out where we want to be within 2 years in terms of ASV growth with this acquisition. And when we buy something, we're really thinking about 1 plus 1 really equals 3 in terms of growth to really accelerate growth going forward and why we did it. And so one of the measures is ASV over the next 2 years. And then we also look in many of these acquisitions that we've done, their margin is much lower than the rest of FactSet.
And so we have a plan to get that business or that group of costs or that business back to the FactSet overall margin profile. And by doing that, we're calculating also a general rate of return for us to be able to measure whether or not we've gotten to where we needed to be, right? We really look at this in terms of 2 to 3 year increments to really get the acquisition to where we want it to be over that period. And included in all that is also integration goals, whereby those are separate goals that will have also a team of FactSet people, especially in the engineering product development area, really integrating that acquisition into the rest of FactSet. And we've seen that with Portware, we're doing that with Fisam, Vermillion, Symba, all of them have very similar goals in terms of where we want to get to at the end of 2 to 3 years.
With the recent ones, yes. Yes. If you looked at FDSG or BiCM, it's too early. Both are performing well. But again, they're nowhere near that 2 year mark just yet.
Mark Lane from William Blair Investment Management. Can you talk about the size of the growth of the fixed income business? That's not something that you've talked about distinctly today.
Yes. We don't break it out specifically, but I think I'll give Rob an opportunity to talk more general terms about how that business has been trending.
In terms of fixed income, the whole fleet map itself into the multi asset class experience. So what we're seeing there is we are being able to sell into fixed income only investment management firms or buy side clients. We're also able to further expand our relationship with our equity clients that have large fixed income investments. It's also helping us, as I mentioned in the previous presentation, in the Sovereign Wealth Fund and the insurance community as a lot of those assets are co blended. So it really is it's helping drive our business into new areas, into new areas of firms, and it's also getting us into opening up larger opportunities in areas of markets that we normally didn't try to participate in.
Is there you could have chosen to as you said, these are not distinct businesses. These are this is just a disclosure framing that you've provided. Why did you decide to segment the business in the way that you did? I mean, why didn't you break out trading, in a fixed income, for example, has been an area?
Yes, it's a great question. So we've agonized over this for years, right? Do you break it up by geography? Do you break it up by client type? Do you break it up by asset class?
At the end of the day, we view ourselves as a workflow solutions company. We thought about all of the different user classes or user types that use FactSet. And there's probably, I'm estimating here, let's say, there's 40 of them, right, that we categorize. So within our CRM, anyone that uses FactSet is one of these 40 types. And then we bucket them into these different workflows.
So there are lots of different options to us. We really looked at the ones that we thought made the most sense to us in terms of how we develop product, how we go to market and what the opportunity is. But not because of how highly matrixed we are, it was not an easy problem to solve.
Can you
talk a little bit about street account and your investments in more proprietary content in the forms of interpretation, things like the summary of sell side analyst notes?
Where do
you think you'll go with that? And are you investing in what you would consider?
Yes. So StreetAccount was a tremendous acquisition for us. When we acquired StreetAccounts, it was really a U. S. Only product.
We've done a lot to invest in the European and some areas of Asia for that. It's an area that we view as further opportunity if we continue to invest. For the 1st year or 2, we really kept kind of a dedicated sales team to sell the web only product. That's not the case. So if
I have to do that, if I have to build my processes around what my software vendor is able to provide, I'm losing competitive advantage. So in having an open platform that is designed from beginning to work with other technologies, you really have something amazing, the ability to provide a unique workflow for each of those individual asset managers and hedge funds, while preserving scalability and preserving the ability to extend and grow their capabilities over time. So my colleague, Josh Cooper, who is part of the sales engineering team for Portfolio Management and Trading Solutions is going to show you a demo of what we've built what we are going to be marketing out to our clients in the coming months. I'm very excited about this. The components that really make Portfolio Management and Trading unique are automation.
We handle many more low touch orders for the buy side better than most of our competitors. We integrate. We design again, as I said before, Portware when it came in was an empty container. We didn't have the luxury of saying you must use this market data. You can only work with these systems.
We had to be Switzerland. We had to work with other technology providers because we knew we didn't have every single piece of those answers. So we integrate well with other systems, whether it's somebody else's OMS, whether it's a different risk model, whether it's a new entrant into the market that we think has a disruptive or really unique value to the buy side. For example, Liquidnet with our OTAS product is a very popular add on to the Portware Enterprise platform. And the information, we have these analytics in house.
We have the ability to concord these various data sets. And we're building it all around an API, right? So the portfolio management components can talk to any OMS. The execution management components can talk to any OMS. Trade automation in which we are a leader, the ability to automate north of 60% or even 70% of the order flow, not just across equities, but across every asset class that institutional asset manager trades is a very unique and valuable proposition to them with room to grow in this market.
The order management functions that are critical to efficient operation of all the internals of an institutional asset manager or a hedge, do they talk to other pieces, so it's talking right now. So it's critical, right, that all of those components with it, it's not a break in the process when a portfolio manager wants to redo an order or run a trade simulation that that whole chain has to start over. And are we getting all the information to the trader when the trader needs it? Does that trader have all the market side information they need from their Faxit workstation, from the analytics providers they've chosen, from the PM. So with that, I'd like to cut the display over to Josh's laptop and we're going to show you how all this stuff works together.
This is a live demo by the way, so Josh has been up since 2 o'clock in the morning running it over and over again, right. So he's probably clear the way to the coffee station when we're done with this. So what we've done with this application, if you've seen a fax it screen before, this might look to you like fax it PV, Portfolio View. And as much as I love Faxit Portfolio View, you could do one thing in it, you could view. You could take the information that you had and you couldn't change it, you couldn't modify it.
So what we've done with the application that you're seeing it here is you've changed it from a read only application with real time
information anymore. And you see a little bit of that reflected in our earnings call. But what you don't see really is the adoption and usage of StreetAccount by the other 80,000 people that have faxed on their workstation. So we've really focused on driving the street account experience through the workstation and web product, building out global coverage. And I think we've got a unique model there in terms of how we approach it versus some of our competitors, which is why it is such a successful product.
And it's an area that we do believe if we continue to invest in, we would get greater leverage for us. And when we think about addressing the needs of the front office, news is obviously one of the things that we want to continue to build out. But we're not going to do it by investing in a huge news organization. We're going to do it by making smart decisions about integrating third party content, alerting you on things you care about and investing in the street account area. Okay.
And then an
unrelated follow-up on your success within the Asia Pacific market. Where is that stemming from? Is it stemming from a market dynamic where those regions are investing more globally? Or is it a product of less competition in those markets? Kind of where is the success coming from and what's it attributable to?
John, you want to
ask Greg to take that one?
I think part of it is just more and more well known in that region and area where historically we haven't been a known player. As our products have grown certainly with risk performance etcetera, you continue to see a large appetite for that. But it's the normal suite of products that you see are doing so well across all the other regions, its analytics and CTS. Our unique content has been very successful. We were very strong in Japan and you want to think about some of the sub regions, but across APAC with our unique content, which then goes to CTS, our analytics suite.
So it's a lot of the same themes and strengths that you see that parlay across regions. I think what you see in APAC is a greater awareness of our brand and recognition as we've grown. That's predominantly what I would say there's obviously a stronger wealth presence there. That is an area in Shlomo where we are tapping into and where there's opportunities. So it's some of it is being opportunistic and seeing where the nuances of the marketplace, but in many ways, it's still continuing to sell and grow, to sell what we have, which has been very successful, which is the analytics and CTS Suite.
This is David Chu from BofA. Just wanted to if you can discuss the selling environment post NYFID and if January looks largely similar to April or have you seen changes over the months?
Yes, thanks for the question. So I might defer to John here if he has further comments. But I don't think we've seen a big difference frankly in the selling environment in Europe. We definitely check-in obviously with the leaders of the different regions there. But it's for us, I don't think it's been any different than 6 months or 12 months ago.
Yes. We haven't seen any dramatic shifts in business process or business behavior, purchasing behaviors. It's been fairly consistent. January 3rd, I think everyone is still digesting. I think there's still some consultative paper still out.
We're still trying to formulate what actually the full effect of MiFID II is. That trickles throughout both the sell and the buy side. So at one level is early days, haven't seen any real demonstrable impact. We keep an eye on it for sure and we'll stay tuned.
Can we give it to Manav, please here?
Thank you. I just wanted to understand the assumptions in the mid single digit ASP growth a little bit more. So it sounds like your conservatism is going to be is on stuff like OpenFAX said and maybe some of the new stuff you put out that you're not sure how quickly it ramps. And then from an industry perspective, all the headwinds you talked about like consolidation active to passive and so on and so forth, like what have you assumed with that? Is that status quo?
Does that get worse? Just some help on what broader industry backdrop you've baked into that mid single digit growth rate?
Yes. So we model out for all of the different users that I just mentioned what our key assumptions are for the growth of those particular groups and how much they'll be paying per unit, as well as the growth of the products that we have out there. So I think we do continue to expect to see some pressure in the front office for portfolio managers, for highly priced research analysts. I think the present company excluded. But yes, so we're just being conservative.
And there is pressure there for you all know that like 10 years ago, you might have had 2 or 3 or 4 different products on your desktop, you're now probably being forced to have 1, 2 if you're lucky. That dynamic I think is going to continue. And we're just we're being more conservative on that side and I think optimistic in terms of what we can produce in terms of product that will sell by itself on top of existing workstations, but also drive new workstations. So the demonstration that you saw from John and Josh, for those of you that know our product well know what a significant step forward that is for us and new types of users that traditionally would not have used FactSet, we now have a lot more market share available to us. So we see that as being a real enhancement to existing portfolio managers of FaxUp, but also potential reason another reason for us to win versus an incumbent to get on that desktop.
So the adoption of that and how quickly that is, will have a big impact.
Hi, Tim McHugh, William Blair. Just kind of tied to that, the 1% growth in research and portfolio trading, I guess, if we I know you don't want to say going forward what you are assuming, but if we went back a year or 2 or 3, what was that growth rate? Is that the normal? Is that what you've been seeing for a while? Or has that slowed down in the current environment?
I think we're going to break it out exactly, but I think it's been pretty much like that. So we've been steady on workstations. You've seen us grow our workstation footprint, but I think what you're probably seeing there is some higher priced users come off and some other types of user classes grow that have a lower cost per seat. And our analytics and feeds business has been growing and wealth business have all been growing really well, which has been sort of driving the difference.
So the company has been a little bit more active from an M and A standpoint in the last couple of years. Do you see the need for any meaningful further M and A in filling in any white spaces? And maybe you could identify where the specific opportunities you
think about? Yes. So I think we were very intentional about going out and acquiring a couple of pieces that we didn't have. So execution and order management and the performance system, those are things that we set out to go get. And we sort of taken a step back now to say, okay, let's get that software integrated in that workflow to fill out the portfolio lifecycle.
What's still missing for the portfolio lifecycle is more content. And that's going to continue to be the case forever probably as the needs of the investment community change. There are still some areas of fixed income that we could invest in. And we're very excited about the opportunity to get more into private markets. That's something that FactSet has not really focused on much in our history, but that would be an area of interest to get integrated.
When we go to the large asset owners now and the sovereigns that are using our multi asset class risk model, a lot of them own private companies, they own real estate. We have solutions for that today, but we could continue to advance what we do there. And we see large institutional asset managers now getting more into private markets. So we're already in there. Rob mentioned the 4,200,000 portfolios.
Most of those are public companies, but we do see an opportunity there in terms of white space. And we don't think anyone's really solving problem well, frankly.
So we'll take our last question from Alex Kramm.
Well, then I'll ask No, no, actually I have 2 questions.
We're allowed to, Alex.
No, no,
I actually have 2, but the first one is really quick. Just at the beginning, Phil, I think you said something about a 1,000,000 addressable users' terminals. Screens. I think a couple of years ago at an event like this, you said 700 to 800. So is that I don't think the market has grown as much.
Is it just because you have a bigger addressable market?
I think if you add up the 3 obvious main competitors, you get to 7 or 8 pretty easily. And then there's lots of niche providers. So on John's slide, I mean, there's wind in China, there's Iris in Australia, there's a lot of screens globally.
Good. So thanks for that. And then just coming back to the whole workflow versus workstation. Just I don't know if you can flush out if it's a different approach with different clients because it sounds very good, like, if you're one stop solution shop now, but your clients are very complex organizations, right? So you're not going to solve everything for everyone.
So maybe just a little bit more color in terms of is there actually an approach that there are smaller companies where you actually going and saying like, listen, rip out everything you've done, we're going to do everything now from you or That
would be
It's the perfect environment, right? Like how is it a different approach and how is this really just sounds like a great story, but at the end of the day, you're still going to have single solution that you're trying to get into.
So the slide that Jon Adams showed, right, which was what a trading workflow looks like for a client. So we actually go into clients, we have a team that goes down and we map that out basically. So we map that out for clients. And we talk to them about different areas of that business. So within these different workflows that we showed, whether it's research, portfolio management and trading or analytics, we can provide a workflow solution for different departments at firms.
We don't have to do the whole thing. But the real opportunity for FactSet really is in our largest accounts today. So it's going in, building on that trust that we have with them and that footprint. And we're not going to do it all at once. You're absolutely right.
I mean to rip out an order management system and execution management system, a performance system, those are once in a decade or 2 decade decisions for clients. But over time, there's a massive opportunity for us. You saw the pie chart. So we have less than 5 percent. If we just continue to do what we've always done well as a company with the new solutions we have, we just think there is a great opportunity for us to continue to grow and execute.
Ladies and gentlemen, thank you so much for being here today. This concludes the end of our Investor Day. And for those of you listening on the webcast, it is the end of the show. There is lunch available outside, and we will be outside for about 20 minutes. We'll come and talk to you if you have any additional questions.
Thank you very much.
Read, write. So Josh has come up with a scenario where he's going to be our hypothetical PM. And what Josh has elected to do is he wants to buy a bigger position in AMT and he is going to sell, right, Josh?
That's right.
Right. And sell into he's going to sell Apple and he's going to buy Chevron. So we're going to generate a couple of orders. Now what he can do in this is see a lot of information about his portfolio in real time. So he can see the construction of the portfolio.
He can see the risk, not just with FactSet's model because it's an open platform. So if it's Barra or if it's Northfield, he can look at those models too because it's an open world. It's an API driven world. We can't just have one answer that fits all of our investors. Remember one size fits none.
So based off of this, he can see all the real time calculations, the real time weight of the portfolio and how that's going to change. So when he wants to simulate a trade, he doesn't have to walk over to his order management system to do it. He can do it all from one spot. So there Josh has simulated trades. Now typically what happens here for those of you that know a typical portfolio manager workflow is I'm then going to dump it into a spreadsheet and try to shoehorn it into my OMS.
What Josh just did right there through an API to Simba is check those orders against Simba and sure enough because we set it up that way and we wanted to show you there are some compliance warnings that are coming up. And right there from the same screen in an instant, we have the ability to override those compliance warnings and send it to trading. Now on a slow day, maybe that doesn't seem like that much of a difference, but what if it's an MSCI rebalance? What if it's a Russell 2000 rebalance? What if I have to completely turn around that portfolio and do those orders over and over again?
You can begin to see the power of integration and automation between these systems. Now we're in Portware and those are the orders that Josh has sent through. So they've gone straight from the PM through compliance and to the trading desk in an instant. And what Josh is seeing here is this is an industrial strength EMS. The information that's available and
I know this is kind
of an eye test, so you're going to have to trust me. I know you can't see the individual values of it, but we will have a demo station set up later. It's every piece of information that Josh needs to trade, because now in our fictional narrative, Josh is a trader. Every single piece of information that he needs to trade, the bid, the ask, the level 2, the instructions, broker restrictions, if there's a commission target, what comments have come from the portfolio manager, what's the sector. Maybe we want to see if there is something we want to look at like street account from the fax at workstation.
So there are controls embedded in the EMS, so he doesn't have to go over and rekey once the order is there. There are controls embedded that enable him to decision. So that's really what an EMS needs to do. It needs to give the trader all the pieces they need at point of decision in order to make that trade quickly and effectively. So he's going to route this order out, in this case to Barclays.
All of Barclays electronic trading capabilities are loaded up into the EMS. That's what we do. We maintain these current and active links to all of their algorithmic trading. And now that Josh has traded it, we're going to close the loop. And in real time, if you look at the column, you're going to see that Apple has started to sell, right?
So it updated in real time. So when he's selling those shares of Apple, it's not enough to say, okay, the trading desk knows, right? The execution management system knows the order is filled. The order management system knows the order is filled. The PM, when they're calculating risk, needs to know that their position and their portfolio has changed.
Therefore, their risk profile, their contribution, their VAR, their tracking error have all changed too, right? So in real time, we have the ability to update the PM when it matters the most during market hours. So that was one scenario going through a couple of orders, but our clients are dealing with a few different things as well. So let's look at a couple of different scenarios. So well and good that we can do that for 2 and 3 orders, right?
But what if we have 1,000? This is the twinkling grid. This is one of the problems that a lot of traders are having to deal with and it's not really a very efficient way to try to find what's the trade where I want my traders attention budget. So instead, let's look at it in a different way. Let's look at it in a different visualization than the grid.
So here we are. So Josh just executed all those orders, selected them all in one click. Now let's see them moving through a visualization that's going to give us a better picture of where our attention should be focused in the market. So here are all these same orders, right, that are shown in terms of expected value and basis points impact. So over down here in the lower left quadrant, these are all the orders that aren't going to have much impact whether they're traded superbly or whether they're just traded okay by an algorithm on the street.
So Josh is going to select all those, wave them off to a broker. The order I need to be focused on is this one over here, aden.vx, because that's got the highest expected value and the highest impact cost. So where we look to disrupt the market is places where we can find a truly different and meaningful way for the trader and the PM to look at information, build upon what we've delivered already in the FactSet workstation and just continue to enrich that ecosystem with not only world class analytics, but also world class automation and intelligence that enables the buy side to do their job better. So with that, I am the last person standing between you and the break. After the break, you're going to be hearing from my colleague, Rob Roby.
But thank you for joining and hearing about PMT.
Ladies and gentlemen, we will reconvene at 5 past 10. Ladies and gentlemen, we're ready to get started. Ladies and gentlemen, please welcome to the stage, Rob Roby.
Good morning, everybody. It's a pleasure to be here today. I'm excited to talk to you about the analytics business as a whole. By way of introduction, my name is Rob Roby. I've been with FactSet for almost 17 years and most of my career has been spent in analytics.
So I started off in equity analytics. I helped build out the fixed income analytics offering as well as focused very heavily on our portfolio services initiative. As you think about analytics, let's talk about the team a little bit. So within analytics, we have a strategy team, we have a product development team, we have an engineering team and we have a quality assurance team. These teams are responsible for all of the core analytics products, that FactSet has today.
It's also responsible for the integration of several of FactSet's acquisitions. So a few of those acquisitions include Biasam. As part of Biasam came Cogniti or previously Finanalitica, as well as Vermillion. So, as we look at today's market and we look at what we're trying to achieve, one of the key things that I would highlight is the expansion in AUM and then the number of dollars flowing into the market on a daily basis. Where is it happening?
It's happening everywhere. It's happening in terms of registered U. S. Investors. It's also happening in terms of the large sovereign wealth funds.
And the question is, what do you do with these dollars? Where do you put the money? So from that perspective, what we're seeing is, we're no longer seeing an equity market, we're no longer seeing a fixed income market or currencies or just a derivatives market, we're seeing a multi asset class market. That's been one of the facets main themes over the course of the last decade. And when you talk about content and you talk about coverage, coverage is king.
You need to be able to cover all these assets today. For example, if you look at a large sovereign wealth fund, wherever they're placing their dollars, they're placing it everywhere. So equities, fixed income, derivatives, currencies, commodities, you name it. They're also doing it in alternative assets. So they're doing it in things like infrastructure, real estate, private equity.
What does
that mean to FactSet? What that means to FactSet is we need to be able to cover these assets. We need to be able to take these portfolios in, these large accounts in and make sure that we can cover every single instrument they invest in. The answer becomes why. The reason we need to do this is because we need to be able to actually measure their performance with a great grill of accuracy.
We also need to tell them what their risk profile looks like for the investments they're making for their firms overall. So, where is growth happening? Where is growth happening within analytics? Number 1, it's happening globally. So, when you think about that perspective, it's happening in the Americas, it's happening in Europe, it's also happening in the Asia Pac.
When you think about the Asia Pacific region, we continue to grow there and grow there significantly from an analytics perspective. We continue to see further adoption of risk. We continue to see the further need for the advancement of performance and reporting, and that's really helping analytics from a global perspective. It's also happening in all different types of firms. So it's not just the large asset managers.
Yes, we do have 100 of the top 100. And yes, we do cover not only the large asset managers, but both the midsize managers as well as boutiques. FactSet scales very, very well across the entire market. But it's also now happening in firms like large life insurers. These general accounts can be massive.
They can have 100 of 1,000,000,000 of dollars, very similar to the sovereign wealth and the large institutional asset managers. We'll see a wide array of assets that they hold that we are responsible to cover. Additionally, we continue to see growth in sovereign wealth funds particularly. There's a large market there as well as the plan sponsors. They become more advanced.
They're looking to diversify their assets away from their traditional holdings and really expand for the future and they're looking for the tools that have the capability to help them expand for the future. So, talk a little bit about the team. We talked a little bit about our client base and where we're winning. The question becomes is how are we doing it? Well, from that perspective, there's 3 main pillars that analytics focuses on every single day.
1 is the increase of market penetration and that's the increase of market penetration with our core products. Those core products are mainly portfolio analysis, risk, returns based analysis, portfolio services, those are the general themes and we invest very, very heavily in making sure that we remain one of the predominant market players there. That includes things such as attribution, also includes benchmark integration. I'll pause there for one second. When you talk about benchmark integration today, benchmarks continue to expand and expand, I would say, fairly rapidly into new markets.
What does that mean? You have your traditional benchmark players, which by the way, we have almost every major global index provider integrated into FactSet, both at the official index level as well as at all of the official constituent level. But we're also seeing an expansion into things such as self indexing, where large ETF providers are looking to other providers to build indices on their behalf. So we invest very heavily in the integration of indices as well as you'll hear me talk about the expansion of our own index business. In addition to our core products and where we're investing there, we're also investing very heavily in the integration of our acquisitions.
Again, I mentioned Biasam, I mentioned Cogniti, I mentioned Vermillion. One of the things I actually like to highlight is part of the Biasam acquisition came Cogniti, which was Finanalitica. What did Finanalitica provide? It actually provided a very niche yet robust risk platform that Biasam was expanding pre acquisition. It was widely and predominantly used in hedge funds, but it had very unique mathematical capabilities that actually fit very, very well into FactSet's core product offering.
So we're able to integrate that. And you'll hear me talk more and more about you hear about MAC. Phil mentioned MAC. You'll hear about fixed income risk. One of the themes you'll hear in the coming days, weeks months ahead is unified risk.
In fact, it's unified risk platform is really the 3rd party integration models, our traditional Mac models and then the expansion of our entire risk platform through the acquisition of Cognivy. Viasam, many clients, even clients will ask us, why did you guys acquire Viasand? It does performance, it does attribution, it feels a little bit like portfolio analytics in your core product. And the answer is 0, I would say, you're right, it does. But what else does it do?
PA is a very good ad hoc historical capable attribution and performance in risk application. What PA doesn't do is it doesn't have the entire workflow associated with it so that you can audit and check any data that's moved over any historical period. You don't have the dashboards and the capabilities to actually do the full performance review that something like GIS compliance would require. So we now have a nice offering and blend between the portfolio analytics experience in the front office and middle office tied to the official performance teams embedded within our client base. Now we can offer clients full capabilities in the front office and middle office around portfolio construction and around portfolio analytics and portfolio risk.
But now we can also go to the middle office and work very heavily with the official performance system teams and take that workflow, take those signed off analytics, the accountability that's there, merge that together and really bring an entire experience between the B1, BICM application tied very collectively to the portfolio analysis experience. So you'll hear me talk a little bit more about the data integration and the benefits there. Taking it a step further, what else are we doing? The last pillar is incubating new business lines. So there's 3 business lines that I'll talk about today.
1 is index solutions. So that ties very heavily not only into benchmark integration and benchmark distribution, but our ability as an organization to build our own indices and to really help in the ETF business, in the self indexing business through unique content and the tools that we offer our clients directly. We also offer a regulatory solution. So we've been doing regulatory for a long time. We've also been doing benchmarks for a long time.
This is expansion in those areas, but in new ways. From a regulatory solutions perspective, one of the key things that we've done is we've gone to the outside market and we've hired a team of experts. We've always internally look stayed close to the regulatory statutes, stayed close to our clients on the day that they need to meet those regulatory statutes, but we hadn't done a lot from an advisory perspective. And one of the things we want to do is we wanted a team internally that we've hired from some of the largest competitors in the industry from a big 4 consideration consulting consideration to really come in and sit down alongside you, our client base, and talk in-depth around the regulatory statutes and around the requirements that you have and offer you expertise there. So that's been one of the main considerations.
It's not just selling a regulatory data set, but it's selling regulatory solutions. It's meeting with you to understand your needs. And one of the areas we're going to continue to invest in is the build out of a regulatory platform that not only offers you regulatory data, but offers you a regulatory workflow for many of the regulatory statutes that I'm sure many of you will ask questions on towards the end of the day today. So in summary, those are the 3 real big objectives we have from an analytics perspective: continue to build on the flagship products in the marketplace we have today work on the integration of the products that I described to So, when we think about some of our strengths, we talked about where we win, we talked about our 3 main pillars of our strategy, what really differentiates us? The one thing I would say about portfolio analysis is it is a truly multi asset class application.
You can get in there and look at an equity only portfolio, you can look at a fixed income only portfolio, you can select any index that's available in the globe today and do robust analysis from an attribution and risk perspective. Additionally, not only do we have our content embedded in there, but we have many of the gold standard third party providers in the industry. So we do remain an open platform. And Rich is going to talk to you a lot about the open platform capabilities and the integration of new datasets, but we've always integrated the best third party content in the industry that our clients have demanded. That gives us full coverage across the entire globe.
On the multi asset class risk front, you'll see a slide shortly that talks about our 3rd party partnerships. We started with a partnership with Northfield adding their factor models and their optimizers to our platform. We also partnered with MSCI. We've partnered with Axioma. We've partnered with a number of the 3rd party industry leaders.
But as of late, we've also started to build our own risk models. Question is, why we started to build our own risk models when we've integrated the best in the street on the 3rd party side. We've seen a demand from the marketplace that is asking for new and unique approaches to how risk is calculated in the industry today. So we took our research team and we've been evaluating our capabilities and we've built a best in class fixed income model and multi asset class risk model to also be available in the industry. That also was further elevated and pushed forward by the acquisition of Viasand and Cogniti and the capabilities there.
So for example, one of the things Cogniti does that's quite unique and they have IP around in the industry is how you handle fat tail analysis when you're looking at risk. We were able to take that, use that not only from a Cognigy standalone perspective, but integrated into the portfolio analysis framework. Additionally, when you think about multi asset class performance and attribution and risk, Phil mentioned 20 years ago or probably even longer than 20 years ago now, 2 factor Equity Brinson methodologies for attribution. I can remember the days where you're grabbing monthly files and you're trying to load monthly files into an application and you're running very basic attributions to get a rough estimation is how a portfolio manager exceeded or underperformed their benchmark. Good news is, those days are a little bit behind us now.
And I would say that FactSet offers 7 different families of attribution models in the industry today. Those 7 different attribution families, I didn't say models, you can have many models within each one of those families. But out of those 7 families, you can do equity attribution, you can do fixed income attribution, you can do balanced attribution. And the other thing you can also do that we're getting ready that's actually in beta right now and released for some clients is passive attribution. So the question becomes is, for the active manager attribution is great, what do you do for the passive manager?
There are passive attribution models and there are benefits to running analytics from a passive perspective. So we've invested very heavily in continuing to be at the forefront from an attribution perspective. We've also done the same thing with our risk analytic capabilities. When you talk about risk analytics, you have to talk about OAS models, you have to talk about Monte Carlo, you have to talk about prepayment and loss. And the reason why I highlight those in particulars, you can't have check the box numbers.
If you're dealing with a structured product portfolio manager, you need to have the best prepayment and the best loss models in the industry. If you're dealing with a heavy degree of credit focus, you need to have the right focus on OAS. So those are key ingredients into the calculations that we're able to provide. As I jump into risk, the one thing that I didn't touch on that slide was about scale. And FactSet has always been at the forefront in technology, and Gene talked a lot about our transition and our investment in furthering our technology.
From that perspective, there are 4,100,000 portfolios that sit on FactSet and are uploaded every single day. That is a tremendous number of portfolios. If I try to give you the AUM number on that, I'd be a little amiss, but it is 4,100,000 portfolios that we upload every single day. You need to have scale, you need to have infrastructure, you need to have speed in order to do that. And when we load them, we don't only load those portfolios, but we run the analytics on those portfolios in real time.
So that as users relying on our applications or relying on our data can get that information at any hour or minute they need that. Further, as I talk about unified risk and our expansion there, why does risk matter so much right now? The one thing I'd say of why risk matters so much right now is, again, it's not only factor models. We're moving beyond just factor models, just optimizers, just portfolio simulations, and we're working into an environment now where you need to have full coverage, infrastructure, real estate, private equity. You also have to have the ability to calibrate the models potentially on the fly to meet the investment objectives and the risk profile that you need to achieve.
So John Wiseman, our Global Head of Sales is going to talk a little bit and I don't want to steal his thunder, but one of the press releases we put out was the recent partnership or the recent client that we've worked with called Alberta Investment Management Company or Aimco. It was a large unified risk win for us and that was possible due to the integration of Cogniti, due to the FactSet Mac capabilities and due to the front end applications that we're able to produce and that we have in the industry right now. A little bit of history on portfolio analytics and the evolution of risk. If you look back to 1998, again, you'll see that's where we started the formation of our 3rd party partnerships. And then in 2013, you'll see that Faxuty really started to invest heavily in its own multi asset class capabilities, not only doing it from a Monte Carlo perspective, but all other different types of methodologies such as linear macro risk and then came along the Cognity acquisition as part of Biasam, which further allowed us to bring our risk capabilities even further into the marketplace.
The risk pieces wouldn't be possible unless you look at the top of the slide. And when you look at the top of the slide, you'll see portfolio analysis. That is the application where a lot of this information comes to life and is readily accessible and usable. The other part of it is portfolio services. What is portfolio services?
It's been an area of acceleration and growth for our business. You've heard us talk about it for about probably the last 5 years since its inception. But as we're loading these 4,100,000 portfolios onto the system, we're producing analytics that are much more robust than they were 20 years ago. The question is the quality and the timeliness of that information. So we've invested very heavily in the technology to not only integrate indices and integrate client portfolio holdings, but to make sure we've integrated it the right way.
If something kicks out, it kicks out in real time, doesn't matter what time of day or night it is, we're taking a look at it and we're trying to understand why. Once we know it's loaded and it's complete, we're running a full set of analytics. As we run those analytics, again, we're making sure that all the analytics that you rely on are accurate and correct. And that's all transparent through an application called Control Center, where you can actually see in real time not only what data you're going to have available to run, but the quality of that information as it comes through our system. This really ties back into the consideration of the portfolio lifecycle for FactSet.
So you heard John talk about the PNP aspect. You heard him talk about real time risk. A lot of that becomes feasible because analytics and PMT have a close relationship and you can now use things such as real time risk to trade your portfolio. So that helps out on the front side of the portfolio lifecycle where you're talking to the front office. This also helps us on the backside of the portfolio lifecycle where you start to talk about client reporting.
So I didn't talk in-depth about Vermillion, but I will for a quick moment here. Vermillion is a very robust reporting tool that Faxit has acquired. Why did we acquire Vermillion? The reason we acquired Vermillion is FactSet has native reporting capabilities within it that are quite strong. But the difference there is it's very heavily reliant on FactSet data.
And a lot of clients were coming to us saying we want the ability to not only use FactSet data in your reporting capabilities, but we also want the ability to use other sources of information that we have internally. It could be a data warehouse, it could be other third party providers that they have direct relationships, it could be unstructured data that FactSet knows nothing about. Vermillion gave us the experience to have a reporting capability, a reporting engine, a reporting platform, a reporting workflow to have FactSet's data move into that application in a turnkey environment, so the client is no longer stressed about getting information out of a system such as ours, but can then also quickly integrate data from other locations into a full on reporting suite. So on the back end of the portfolio life cycle as I describe, all of the attribution, all of the analytics, all the risk numbers I'm talking about, not only reside in FactSet and FactSet reports, but are also turnkey into the Vermillion user experience and the Vermillion reporting capabilities. So talking about that in a little bit more detail, as we talk about the bringing the acquisitions together, as we think about ViaSam, the big thing going on right now is the data bank, the data vault, and that's the ability to transfer information between PA and our analytical applications and buy SAM in real time.
So clients that are running official performance via the B1 application and want to see it in PA, it all transfers through a central data layer and is completely turnkey. Same thing, clients that are running B1 or PA, they want PA numbers and analytics to also become available to the middle office for the B1 user experience, the data is fully transferable between the applications. Not like it doesn't stop between PA and BI SAM, you can also send BI SAM information directly into the Vermilion reporting experience, application and workflow, and you can also send FactSet portfolio analytics information directly into the ViaCM user and workflow. I'll touch on the 3 new business lines quickly. So we talked about where we stand on our core products and our core investments.
We talked about the integration of the recent acquisitions that we've made and the reasons behind those. And now let's talk about where we continue to expand within analytics. So from the regulatory solutions perspective, we get asked questions all day long around MiFID. I guarantee you're going to ask questions. I've got a number of questions for you on MiFID.
But we have a team of experts now very heavily dedicated to each point of that regulatory statute to really partner with our clients and understand the solutions we can bring, the tools we have today, as well as where we believe that regulatory statute is going in the future. It's not just Mifin, it also holds true for N Port, it holds true for Solvency II, PRPS and Kids. Those are just a few we're heavily focused on. Not only are we focused on them from a data experience and to solve the information you need to build out and to meet those regulatory statute requirements, but we're also very heavily focused on the reporting side and we're also very heavily focused on the on platform experience to take this to a whole different level. Index solutions, so we've been in the business of integrating third party data, as I mentioned, for a very long time around indices.
As we've also been doing that, we've been collecting a lot of our own content. And as we've been collecting a lot of our own content, you hear things such as GeoREBS or you'll hear things such as Ribbix, that all came through the Revere acquisition. As we're putting all this information together, a lot of clients are coming to us and saying, can you build indices with us? And the answer is yes, we can. And what have we done to date?
We've there's over 67 indices in the industry today that are either co branded with FactSet or rely very heavily on FactSet's information. 1 of those indices in particular or one of the indices for an ETF in particular is the iShares Automation and Robotics Index. It has become number 12 out of the top 20 in terms of new AUM flowing into an ETF. We're very proud of that. That ETF is very heavily driven off of the RIVIX proprietary information that FactSet provides.
So, as we continue to invest in the area of index integration, unique content sets and our tools, you're also going to see us continue to expand in terms of our index capabilities. As we think about the future and beyond a little bit, Gene talked a lot about APIs. One of the things that we've been heavily invested in over the last 12 months has been bringing analytics APIs to the marketplace. So everything I've just talked to you about, portfolio analysis, risk, that entire experience, it's definitely a very powerful tool and very capable within our platform. But a lot of clients are coming to us saying, what can I do off platform?
We want the attribution models, we want the risk numbers, we want the calculation engines, we want all of those features, but we want to take it and build it ourselves. They're hiring developers, they're hiring engineers in house, they want to integrate different information, different solutions from different places. One of the ways we can bring that to market is through analytics APIs. So what we're going to be doing is releasing and this is actually already released for about 3 clients in the market today is we're going to be releasing a full blown development portal around analytics APIs in the near future. With that, I'm going to turn it over to Rich Newman and Lauren Klein.
And Rich and Lauren are going to talk to you about Content Technology and Solutions as well as Open FactSet.
Thanks, Rob. Appreciate it. I just want to tell everyone here, I'm thrilled to be here today to talk about the Content and Technology Solutions Group. I'm Rich Newman. And I want to give you a little bit of background about how we got here with CTS.
Many of you have been hearing about it lately. It's been getting a lot of positive feedback. It's been a huge growth engine for FactSet, particularly over the last few years. To give a little bit of background, I arrived at FactSet in 2000. I like to say I was the founder of a company that was FactSet's first acquisition.
I love that role for a long time. Obviously, over the last few years, we've had many more acquisitions, but I still wear that with a badge of honor. And some people wonder how can an entrepreneur like me be at FAX at 18 years later. And the reason why I'm still here is because what FactSet has allowed me to do is to monetize core competencies of FactSet and create ASV and revenue from it. I'm not interested in R and D, again my background is to build businesses, to build revenue, to build growth.
And FactSet has given me that opportunity. When I arrived in 2000, the focus was again trying to get FactSet at that point to move beyond some of the workstation solutions. My background was much more in the quantitative area. I had built very large quantitative systems, particularly for buy side organizations. And the goal was to take the quant business, FactSet's workstation based business and begin to move that more to production.
And the production side of that was again to provide daily updates of that information. And as you see on the slide here, we built systems to feed 2 production solutions what we called production intricacies. It was great. We were growing the business. The challenge was scale.
That business was very custom. Each client had their own way of doing things. I have to admit, we still have legacy situations where we have that old code in there. Moving forward, as many of you know, we began to acquire our own content, either create it, acquire it, integrate it, always leveraging our own and integration capabilities. And we built what was then the first business around CTS.
The idea of taking our data feeds and standardizing them, so that we can support clients better and build more scale in the business. You move forward and we again, it's probably started more in a quant area. But what was amazing once we standardized those feeds and you think about the content we have, fundamentals, estimates, ownership, M and A data. We acquired Revere, which was supply chain data, which was, as a sense, in our first step into what now is called alternative data. We integrated that data providing a standard framework for that, the business has really grown.
And it wasn't only quants at that point. We began to back end and back end and middle office solutions. It's been a great ride. It's been fun. As you see from the slide up there, we are now over 9% of Faxit's business.
We're material. It gets announced. I'm always excited when Phil mentioned CTS on the earnings call. And we're growing at a compound rate of 15%. And my goal is 15% is not enough.
We want to enhance CTS and make that growth rate even faster. The opportunities out there with alternative data, with more computer processing are huge. And the opportunity that we really saw about, you know, over the last year was how do we move even faster? Does facts that collect more content, create more and more of our own content? Or do we in a sense get back to some of my roots and think about partnering with all the big data firms out there, all the Fintech organizations to create a marketplace for that information?
We're going to jump to open facts soon, but before we get there, I'd like to introduce Lauren Klein.
Hi, everybody. My name is Lauren Klein and I look after the OpenFacts at marketplace, business development and our relationships with our 3rd party data providers. We're so excited today to be talking about CTS, as well as the brand new Open FactSet marketplace. So we were able to accomplish the launch of Open FactSet because we have such a strong foundation in content and technology solutions. And a lot of our competitors have content as well.
We know that, we know that they have their own content they're collecting, and we know they also work with 3rd party data providers. So we believe that we have the strongest industry leading content for a few different reasons. First is our symbology. No one links and connects content better on an enterprise level than FactSet. You'll see in the image above that middle circle, that FactSet reference hub, it is so key.
Every time we're collecting a new dataset, acquiring a new dataset, like geographic revenue, Revere, some of the data that Rich mentioned, or partnering with a firm that provides data, it's all connected to that reference hub. So imagine you're quant sitting at a big asset manager and you're trying to do some analysis on Adidas. Well, FactSet Fundamentals might call Adidas, Adidas LLC and a third party sentiment provider might call Adidas, Adidas Inc. If you're trying to query that, you're in Python, you're trying to code, you're not quite sure, are those the same Adidas? And what if there
was a corporate action? What if there was an acquisition?
What if they're traded on different exchanges? They're typed differently? What if there's a spelling error one day? Well, FactSet does that all that hard data integrity, linkages and symbology, so that all of our users can get up and running testing using and generating alpha incredibly quickly. The second area where we feel we have a very strong content advantage is around our expertise with our CTS team.
John Wiseman, the Global Head of Sales will be up next talking about one of our pillars, which is service. I started my career at Backfit 12 years ago on our client services team, and we have specifically for CTS an implementation team that sits alongside clients, implementing data feed solutions, providing a true white glove service. And then finally, the last area where we believe we have strong expertise is our speed to market. With Rich's leadership within our team, he is always encouraging us to move faster. We're out there chatting with clients all the time.
We're responding to their needs, what's happening in the industry, we want to go to market with solutions as fast as possible. And as we talk to clients really over the past 12 months, we noticed a few key themes that the financial industry was shifting to that provides an amazing opportunity for a firm like FactSet. We're incredibly well positioned to capitalize on these four trends that we're seeing in the industry. The first being what Rich mentioned earlier, the growth in alternative data. The amount of data being produced these days, whether from Fintech companies or firms even larger than FactSet is amazing.
What we're going to do is, if you remember that reference hub, we're going to take it all, work with these providers, link it together and be able to deliver it out to our clients. Another shift that we've noticed is presents an incredible opportunity for FactSet in the coming year is this rise of data scientists. We're seeing our firms hire more and more titles like data engineers, quants, data scientists, more technologists that need the data in a flexible manner and they need really strong industry leading content.
And data science is really interesting because, again, I've been in the field for a long time. And when I was at a speech recently I was giving a speech in London. And the question was asked, what do you look for when you hire new people? Where's the industry going? Where's the growth?
And I said, you know, it's gone from people still need a finance background clearly. I want to make sure I know a lot of you have finance backgrounds, that's very important. But the other thing we've definitely noticed is this need for being able to be technical, being able to know math and so on. The additional characteristic I say is just being creative. You no longer can just follow Graham Dodd when you do your investment analysis.
You have to be very creative when you're finding new ideas. The whole idea of moving from active to passive is real, but that doesn't mean active isn't fair. And active means using things like satellite images or using things like new sentiment information or using other types of data and providing the data science group that actually can make sense of that and ultimately provide alpha. The other trend we've seen in the industry is the infinite computing power. The fact that it has our own data centers, we've been incredibly successful.
We like to say sometimes we were the cloud before the cloud, but there is a real cloud opportunity out there. With increased data, big data, increased need for machine learning, what we've been able to look at is we can either keep enhancing our data centers or leverage the cloud. What the cloud provides us and provides you and users out there is infinite capacity. So now when a large hedge fund or asset management firm or sell side organization wants to run 100 natural language processing algorithms around fact sets earning transcript information, that transparently can be available in terms of how much it costs and so on. So both the power of the cloud and then the power of machine learning, being able to do these applications with using computers is really out there.
We are going to be leveraging that with CTS and with Open FactSet. That's the opportunity we see. And those partnerships we're seeing with the cloud providers and things you're going to see coming out from us in the CTS group soon, you're going to see how we're partnering with the cloud providers in this space.
And with that, we'd love to introduce you all to the Open FactSet marketplace. So we're going to switch over to the live screen here. What you're seeing is open. Backset.com. It's completely open.
So if you have your computer open right now or hopefully you're not on your phone, but if you are or during the breaks, we encourage you to check it out. So we're 7 days old. We launched last Tuesday and the feedback those first 24 hours was phenomenal. A few different things that we were commenting on, one is we had a lead in every single region within the first hour. Our first Asia Pac lead came in, the first EMEA lead, the 1st Americas lead.
And when I say lead, that means it's a request to trial or even purchase our data set. The second really interesting piece of feedback within that first 24 hours was we were getting trial requests for our brand new provider content. We're going to introduce you to some of those providers in a second. But we also were getting leads for our own content. We had clients clicking and calling us saying, we've been a FactSet Fundamentals DataFeed subscriber for a decade.
We didn't realize that you guys had supply chain. That's a great complementary data set that we'd love to trial now. Then the third really interesting thing that happened in the first 24 hours is besides clients contacting us, we had a number of data providers reach out to us and say, we want in on that marketplace. And these were anything from startup Fintech firms to again firms that are bigger than backset that have really strong financial data. So the network effect is definitely real and we're seeing it even in the 1st 7 days after launch.
And I have to admit, I've done many product releases in my career. And this has been the most exciting and it's just transformative, not only for FactSet, for me personally, it's just been amazing to see the enthusiasm. And as Lauren said, we got inbound requests, not only from clients, but from potential partners. I won't cite the names yet, but what really amaze me is some very big players, bigger than we are, who said, we want to be on this marketplace. Again, I hope many of you saw the press release, many of you or some of you maybe have even tried the OpenFAX at Marketplace.
Now what you see in the public site isn't everything. Clearly with a login, you're going to get a lot more information on it. What we'd like to do is take you through a little ride and show you what the Open FactSet marketplace looks like, highlight important areas. But getting back to what Lauren showed before in that wheel and the connectivity, the key for every partner, and we're vetting this very carefully, is to remember, this is institutional. We're not trying to create a store, where you basically just have various feeds on the system from any partner.
Every partner is vetted, they need to be financially sound, they need to already have clients. And basically what we're going to be providing to them is that distribution, that connectivity. The whole idea now is that users and data scientists don't want to just look at one piece of information. It's the connectivity across that information and the ability to do that more quickly. You go to a firm and many of your firms, you'll hear 90% of the time is spent on data integration.
We want to do that for you so you're spending your time on data science. So to begin, one of our goals is to make sure that people come back to the site. So what's new obviously has some new data feeds because we just released last week. And Genscape, which is a satellite company and Estemize, which does some, crowdsourcing earnings estimates. Alexandria is a sentiment company.
And Reprisk is an ESG company, environment, social and governmental information. Again, going back up top, the beauty of these, these are all leaders in their area. And we spent a lot of time over the last 3 or 4 months leaking this data in. But like anyway, if you think about you go into a marketplace, first thing you typically do is go to a catalog. And we have categories of data from different types, corporate activism, crowd sourced.
So what you're going to see, and also our idea to get people back, is we're constantly adding not only new databases and new sources, we're going to be able to show what's new and what's coming. I think Lauren's probably spoken to 300 or so partners already, potential partners. The demand to get on the marketplace is already outstanding. So let me look at again, there's various types of data you can see here. But if we looked at ESG, what you quickly see now is here's some data sets from for ESG.
Reprisk, as I mentioned, is a partner. They're actually based in Europe. And they have ESG data. True Value is coming soon. It's another ESG partners.
Again, we're open. We're not going to be selective and exclusive as to who becomes a partner in Open FactSet. If I go to RepRisk and I ask for more details, every partner gets a page like this. They're basically and by the way, FactSet is our best partner right now. We have 20 data feeds from FactSet alone, you've heard of them.
But FactSet also gets a page for each data feed and a data science piece and so on. So when you come to a page, you're going to see some highlights, you're going to see the geography, what regions are covered, then every partner. I'm going to try to play this. I hope it works, but
OpenText is proud to partner with RepRisk. RepRisk provides access to the world's largest due diligence database on environmental, social, governance and business conduct risks. Its data allows for quick and easy in-depth risk research.
Don't worry, I won't play the
whole thing because Rima will get upset if we're going to running out of time. But I'd love to play the whole thing. But think about it, every partner, why they want to get on the marketplace, is they're getting that, they're going to get that. And also what we call at a glance or data science piece. So again, we have a data science team within CTS.
And for every partner we have, they're working with the partner, putting together what's the use case of that data, basically some images, and ultimately information about how that, not only that firm, that partner works within itself in data, but how it links to faxed content or other content. So again, the power here is the video, other information. And the piece that I think a lot of people really like to see, and I'll pass this on to Laura now, is what else are we providing there?
Yes, definitely. One of the neat areas is the related product section at the bottom of every page. So think about marketplaces you guys use probably on a personal level like an Amazon. If you go on Amazon and you're about to buy sneakers, it might prompt you saying people who bought sneakers also bought athletic socks. We've done the same thing with data feeds.
And that's really in part to our data science team, which has done a really incredible job thinking about which content sets are complementary and putting together those pieces, giving them ideas on what they can use together. So within related products, under Repris Page, you'll also see FactSet Supply Chain Relationships. And if we go to FactSet Supply Chain Page, you'll notice it's identical to RefWorks page in the same format. So every single page up here, every single product has that same video, has that same data science piece and has a lot of information about the feeds. One thing we also want to make really clear, unlike in Amazon, we're still targeting institutional.
Our own data feeds are expensive. We're going after institutional clients, not retail, same with our partners. So we're still going to give again that high touch service, that white glove implementation and everything that goes along with buying a data feed involved in this open platform marketplace. And our favorite part of the site is probably when you click Contact Us, what this does is it generates a lead to FactSet that our entire sales team will follow-up on. And that's what's really been happening over the past 7 days.
We're excited for it to continue to accelerate FactSet's business. So what's next? We're not done. We go back to the slides. We actually have an amazing short term roadmap ahead.
We have a lot of things coming up over the next couple of months that we're excited to give you guys a peek on right now. The first is the expansion on the number of providers. So Rich mentioned, yes, I've probably had conversations with about 300 different data providers. It's not hard to get meetings. It is really hard to bet them.
So when I'm looking at data providers, I'm looking at it through a lens of really 3 different angles. One is, I'm taking a look at their data, making sure they have very high data integrity, very high data quality. The second thing I'm looking at when I'm vetting partners is market demand and uniqueness. FactSet has an amazing inflow of client requests every single day saying, could you guys add ESG data? Could you add this specific provider?
Going through those, seeing which providers have the most market demand. And finally, the third thing I'm looking at is business credibility. I think especially when partnering with some of the smaller FinTech firms, we want to make sure that they have 20 fourseven service. We want to make sure they're fully funded, that they have a strong Board of Directors behind them. So I'm looking at data, but I'm also looking at different businesses, as well as flushing out a whole portfolio of unique companies to be able to offer to our FactSet clients.
So we're definitely going to be expanding the number of providers, so you can continue to check the marketplace. But besides data providers and Open FactSet, we're also going to be adding solutions within that same ecosystem.
And Lauren mentioned solutions. So this is a little bit of a tease to you. But again, I'm hoping you saw the press release last week. Keep watching. There's more to come.
And again, data feeds was the start. Back to my roots and back to sort of what Phil Snow says to me, it's to monetize. I'm not here, you know, it is fun, I admit it. We're trying to figure out a way to quickly enhance the CTS business. With OpenFacts and with the data feed, it's already enhancing it.
We're getting leads into clients we never got before. It's amazing, within a week, because of the OpenFAX and marketplace, just on the data feed side. But what's next? Well, clearly, there are solutions out there that need content. A lot of Fintech firms and also a lot of larger firms that need have solutions that need fax that content.
Alternative data is very important for them. So over the next few weeks, you're going to be seeing some press releases and some announcements of some FinTech firms we're partnering with, who will be part of the OpenFAX and ecosystem. So again, basically providing what we're calling solution exchange to the OpenFAXIT marketplace. So again, I expect you all to be paying attention every day. The next piece after that would be what we're calling a research environment, partnering with the clouds.
Think about what we're doing now. We're providing data feeds to clients. Clients are basically creating their own SQL environment, putting that data in and creating applications. The next step is, why don't we just host something like that and provide an environment with again unlimited scale, unlimited capacity with all the data loaded already and then updated on an ongoing basis intraday for these different data feeds we have, not only the fax and feeds, but all these alternative partners. That will be in a cloud environment.
Again, that ability to have infinite capacity is part of that. So in a sense, a research platform, where firms are going to want to do some work on that SQL database, tie it into R, tie it into Tableau, maybe use some Python and so on. Again, the growth there and you can think about the economics in the business model, we're moving much more to a usage model in that situation. And the last piece, and this is the grand vision, is more again, the ability to provide an API environment. So again, not only for solutions that are ready built we're partnering with, but the idea that we're building an environment where developers in the community look at OpenFAX as the way to build their solutions.
That's the ecosystem we're building. That's the exciting way we're going. It started as a dream with CTS in a sense and it's moved on now. We like to then say it's one of the material part of Faxit's business. It's been a great journey and ride for both Lauren and me and the rest of the team.
It's just beginning. That's the real exciting part of this. So with that, with exactly 10 seconds left, we did it. That was great. I'd like to introduce John Wiseman.
And I admit, I've known John a long time. And John is because of OpenFAX that released this past week is very busy, because his sales teams are creating contests to see how much OpenFAX that they can sell, how many leads they can generate, basically what's the leaderboard, Phil Snow wants to get on it. So sorry, John, for keeping you so busy for the last few weeks, last week, but we're going to keep you busier. So thank you very much, everybody.
Good morning. It's a pleasure being with all of you today. I'm going to talk about 3 broad topics. I'm going to talk about our sales strategy and our client approach. I'm going to talk to you about our people, the size and shape of the organization.
And then last, I'm going to talk about our regions. I'm going to talk to you about some of the attributes they share and then where they differ. In terms of our sales strategy, focus, engage, act. These are kind of like our mantra. It embodies our approach to clients, how we collaborate internally and it permeates everything that we do each and every day.
I've been in this role 12 months now and I would say we have greater focus, we have a greater level of engagement and we're being more decisive in the actions that we take. I think there's early promise in the results. It's validating our approach, but there's still work to be done. When we talk about the sales strategy, it's really the 4 tenants of what you see in the slide above. The first drive core facts at ASV through new and existing business.
Sounds pretty basic, right? It's what we need to do, right? Get back to fundamentals. We have 1500 people in the Global Sales and Client Solutions organization. They are focused both on existing business and new business.
As most of you know following our company, a great majority of our ASV comes from existing clients. That said, we have teams that are focused and engaged directly and daily with our prospects to bring in new business. Rob Roby mentioned Aimco, Alberta Investment Management Company. To just give you an idea that our new business teams and business development teams were not down chasing the short tails, the $200,000,000 to $300,000,000 hedge fund. We are focused across the board.
That is a large strategic win for us. It's in Edmonton, not a place you normally travel to or would prospect and it shows our enterprise sale. So it's a great example of when we talk about new business, the level of focus and engagement we have there, while as it relates to what we're doing on the existing business, we continue with our client service teams and the 1500 person strong organization continue to drive for results. Again, focus, engage and act. 2, Phil mentioned this about regionalization.
FactSet had been more of a centralized organization as it relates to sales and how we looked at it. As I came in, what I wanted to do was empower and enable the individuals in the regions to drive and deliver results to allow them to be more agile, more active and nimble. We have incredible talent in our regions. We have strong managers. It's incumbent upon us to empower them and give them the ability to act.
They know their clients, they're focused on their markets, they're engaged with their clients each and every day, they know the products and services they need, empower them. Regionalization, second thing that we did. Cross selling and upselling, we have a tremendous amount of products and services in our stable. You've heard that from all the people today. In addition to the acquisitions that we brought on, now we only have enhanced our capabilities as it relates to what Phil talked about, about the portfolio lifecycle.
Our ability to start from idea generation to risk performance, trade execution and client reporting. Now we can complete that whole cycle. Our ability and again when you go back to number 1 and our core strength where we drive ASV through our existing accounts, the ability to cross sell and now up sell has been completely enhanced and increased through those acquisitions as well as the stable products that we already have. It is what we do. When you look at better ASV growth, that is cross selling and up selling within the organization.
So there's a strong emphasis on that and the acquired companies only add to our capabilities. Elevate our approach toward most strategic accounts, Kind of seems simple. Most people have strategic account programs. That's not novel. Facts that typically have looked at its accounts And again, there's a disproportionate amount of ASV in those top 50 accounts.
Historically, our strategic accounts were embedded within the regions. What we've done in the past 12 months is lift them out of the regions, give them direct line of sight and accountability. As Gene was up here before, he's brought a new phrase in the FactSet, it's called one neck to choke. So we've put one person responsible, Tom Griffiths, he's a Senior Manager. He looks after our global client team.
We've also created a new role called an executive relationship officer. We've taken some of our most senior managers and we've put them back in the field to raise the level of engagement in the C suite, to increase our opportunities that we have in those largest and most strategic accounts. So we have direct accountability, direct focus and we've raised the engagement. That's a change, that's a difference. Focus, engage, act.
That's not something that we just talk about externally and apply in our external approach. It's something that we're using and I've directed my managers to focus on internally. We've enhanced across the organization our level of collaboration and engagement across, amongst and between the portfolio development of the product developers rather, the engineering teams, marketing, sales and our workflow strategist, right? If we're going to unlock the true potential of our offering, we need to create that level of engagement. Not only do we want to solve our clients' greatest problems, we need to solve our own problems and challenges by working together and collaborating and indirectly that's solving our clients' problems.
2nd, we looked at driving efficiencies through our client service and client solutions business. We've expanded our footprint in our centers of excellence, gaining and driving efficiency through the process while not losing quality. Last, in terms of focus, engage and act, business information and business intelligence to arm the sales force, data driven metrics that are necessary to move forward. We have not fully implemented, we're close to completion of an implementation of Salesforce across our client facing staff. That's going to give us the business metrics and data we need to inform us to make sure that we're attacking the prospects in the right manner, that we're following up in the leads, that we're engaged with our clients in the way that we need to.
We're getting white space reports which we're using today, which is aiding in the cross selling and the upselling efforts. We're getting COMPASS or client satisfaction scores and ratings. We're more informed about our clients. Solve our clients' greatest challenges with the power of collaboration. That's not just our corporate mission, that's our sales mission, right?
It's in our culture, it's in our DNA. We are problem solvers, we are analytical by nature. We have facts that love rolling up our sleeves, right? We lead from in front. Everyone gets down and dirty.
We are out there in a native habitat with our clients where they live, sitting with them in direct collaboration and partnership understanding what their challenges are. What we're looking to do and that is our mission is to take those challenges and create opportunities. We love to talk about capabilities. That's what we talk about. Our capabilities that FactSet brings to bear and in partnership with our clients, their capabilities.
And it's the marriage of those capabilities in that partnership that creates something truly unique. And that goes to what you heard Gene talking about when he was thinking back to his days at JPMorgan and he was approached by FactSet and it's our selling approach, it's that consultative collaborative approach where we're really trying to marry those capabilities together to create those opportunities, right? It's a consultative selling approach. You could call it solutions selling, we could call it enterprise selling. We talked about our transformation or move from not just a workstation but to a workflow company.
This is that transformation. It's our approach. We look at our clients, we look at the client enterprise. We then look at our capabilities and the 4 pillars that we can bring to bear, content, analytics, technology and service. Let's talk about 3 of them right now.
Everyone is everyone that you've spoken before me has touched on this, from Phil to the strategist and the product heads in Gene, content, they say content is king. Lauren talked about our Edge, our DMS or data management service or our EDM or entity data management. The way we stitch these disparate datasets together in that FactSet hub to create an essence from the client perspective a seamless database, right, of a bunch of disparate data. This is clearly whether it's our proprietary data, the client's proprietary data, 3rd party data or more and more what you see now is unique and alternative datasets. This is one of our competitive advantages and how we win.
We do it and Lauren and Rich talked about this. We do it in a way where we're flexible and we're open. So I'm jumping over to our 3rd pillar in terms of technology that openness, that flexibility that we offer our clients as we deliver that content, irrespective of the mechanism whether it's on our workstation, whether it's on our off platform feeds and APIs and on demand services or where it's hosted in the cloud and what Rich and Lauren are building with Open FactSet or giving it to a quant shop who's ingesting into their black box and using it their way. Our ability to serve them up that content in conjunction with theirs and that FactSet Hub make it truly unique. But it's the flexible and open technology, that modular approach, that openness that we take.
We're in some ways technology agnostic. We don't want technology to be the inhibitor. We are a technology company. We are providing that but we also know and it's part of our what we feel is one of our missions and our competitive advantage to be open. Let's hit leading analytical applications, the 3rd pillar, kind of analytics, but really the applications and let's talk about that.
So I'll talk about it when I go to the 4th pillar on the next slide. But I started at FactSet in 1991 as a consultant. At that point, we were I'm going to really date myself here. We are a DOS based communication software. All we did was through a phone line, a POTS line, we allowed you to connect to our mainframes and get a bunch of third party data.
None of it was ours. We served it up to you. We had a couple other services like universal screening, data downloading. We just started alpha testing. XL didn't exist.
You were in need of Lotus 1, 2, 3, VisiCalc or maybe you were a Borland guy and you had Quattro Pro. But that was the world we lived in, right? Today, through all the different applications and analytical tools that we provide inside those applications, we can take you, as I said before, from idea generation, pre and post trade compliance, what if analysis, execution, risk performance and client reporting, the full cycle. That is something again with the acquisitions that have helped in terms of the PLC, but that's what we're talking about in terms of how we win marrying the content with the analytics and applications and flexible technology. Let's talk about our 4th pillar for a moment and it deserves its own slide.
I talked about the sales organization being 1500 people strong. We call ourselves Global Sales and Client Solutions, over 70 business leaders, 28 plus offices, of that, 1,000 people approximately are focused on client service or client solutions. They handle 27,000 inbound queries a month via that via I'm email over telephonic. We have a 95% satisfaction or very satisfied rate score on our customer surveys that we do. So again, continuing to evaluate these self critical, continue to deliver on that message of quality service.
And 42,000 actual physical visits out in the native habitat that I'd like to talk about where our clients live. We go see them. We touch them 42,000 visits a year. Industry acclaimed, award winning, valued and appreciated by our clients, envied and feared by our competitors. It is our 4th pillar.
It is a clear, compelling and competitive advantage that we have. I started like I said in 1991. If you look at 12 o'clock on the screen, client consulting, that's what we had. There were 50 people at FactSet. I was one of 8 consultants.
There was no training manual. There was a chair and a phone. The phone rang, you answered it. That was client consulting then. Almost 30 years of evolution in terms of our product and our service and now we have implementation, integration, CTS implementation and support, CDI client data integration teams bringing that data into our systems, right, training and development and a whole host of specialty consultants, RMS and Partners Analytics Consultants.
It's a testament to our commitment to our clients that over 2 thirds of our client facing staff is focused each and every day on unlocking the potential and capabilities of FactSet on behalf of our clients. Let's talk about the regions a little bit. As you look through these slides, the way you should interpret them as client type and product service are in rank order in terms of their prominence in that region. We don't have any figures there. But if you look at those are the client types that we serve and the products that they consume in their respective order.
Another thing that you will see across the majority of the slides or each region predominantly in Americas and EMEA, certainly in APAC as we talk about the consolidation and the cost pressure, the total cost of ownership that our clients are feeling. I bring it up because we talk about on the earnings calls, it comes up cancellations, okay? The great majority of our cancellations when they come, they're in this area. Do we lose to competitors? Yes.
The minority of the time, the majority of the cancels come from here. We win more than we lose with competitors. Where our cancellations are occurring and where you see them is in this consolidation, okay? It's a macro event, we all see it. It's Aberdeen Standard Life, it's Aberdeen, the Scottish Widows, it's a Mundy, it's Pioneer, it's State Street and GE Asset, it's Eaton Vance and Calvert, it's RS Investments and Victory.
We all know, right? That's what's out there in the marketplace. That's what we're seeing, right? So that's what that is, right? We also will see it as we've been proactive with our largest accounts largely on the sell side, working to renegotiate large global deals for 3 to 5 years.
So that's what you're seeing. Let's talk about the Americas. It's our largest most mature market, it's growing around 5%. It's homogeneous in terms of the culture and language etcetera, completely the contrast or antithesis to EMEA, right. It gives us scale and efficiencies in delivering our product.
That said, the headline here is we believe there's tremendous opportunity that still exists in the Americas in our fixed income and our risk over facts at OEMS, which you heard John Adam talk about and really in our research management solutions and the partner suite. EMEA, so again the consolidation theme and cost pressure we see there. Again, you can look at some of the orders wealth management and sovereigns that jumps up. You'll see that happen in Asia Pac as well relative to the U. S.
Where broker dealers were number 2, okay. So those are some of the nuances you might see. Obviously, Europe is characterized by it's more multicultural, multi language. It's harder for us to scale visavis relative to the U. S, okay.
It's a more heightened regulatory posture with MiFID II, Solvency II, ECG is probably the next one on the plate. Brexit is still a fog that exists. We saw some our new hires and our new hires classes that come in from the sell side each summer. We saw more of those come out of the U. S.
In the last year as opposed to London. That said, we're well positioned in the sub regions of Germany, Benelux, Ireland, if any of the asset managers trans out. So Brexit, it's just creating a confusion and fog within our clients, but we're well positioned to handle that. Again, the headline in Europe is multi asset class. We've had great success in a lot of point displacements.
It's necessary in that region. We continue to see the promise of leveraging our multi asset class position in terms of unifying and bringing the front office and middle office together with OEMS, PA, PMP, which is the portfolio management platform that John Adam talked about and our workstation in and of itself. That's where we see the opportunity in there. Again, wealth and sovereign funds, you'll see that as well. Last, APAC, it's a fragmented marketplace.
It's characterized by more larger domestic or insular markets, Australia, Japan, China, Korea, okay. We serve them well. We continue to grow. We opened an office in Singapore. We're going to continue to grow and expand in China.
You're going to see our footprint continue to grow in that region. It is our largest and fastest growing region, okay, and there's tremendous opportunity that sits there, both wealth and sovereign funds as well. And what we're seeing and here's the tagline here, these large domestic markets, while we've done well on them, they are moving global. They have a need for multi asset class. They have a need for global content.
That gels very well into our value proposition. And that's an area where we can continue to work and drive success. We are either going to do that directly or we can do that through partnerships like we forged with Quick in Japan and pair up with large dominant players or again just work directly using our own capabilities and our own footprint. So those are our regions. In closing, some of the younger generation like these word clouds and they were talking to me when I go out and I mingle with Salesforce and I talked to our client solutions team and they were talking about these word clouds in a way that they wanted to demonstrate like who and what we are and they challenged me to say what is FactSet to you, John?
What do you think about FactSet? What do you think about FactSet sales and where do you think our future is? I'm doing a word cloud. They didn't think I could. I'll let you guys see if I did it.
This is my view. At the end, we're an analytics company. That's not necessarily the analytics workflow, but we're analysts, we're analytical. We like to get deep into the details, okay? We're a technology company, 1st and we're Content, you heard about that.
Services and people, I'm going to juxtapose those a little bit. Services is more not how Phil calls it in our 4th pillar. Services to me is an area where we're going to continue to grow. It's our professional services business. As we talk about enterprise selling and where we need to go and meet our clients' demands and needs and look out beyond the horizon.
We're going to have to enhance our implementation, integration and support teams. When we're delivering enterprise solutions, we need to be more turnkey or white glove as you heard from Lauren, okay. So services, I mean in that, people is about our client service, people is about our clients, people is about the relationships that we create. We are not a transactional based company, we are not a transactional based sale. Anything and everything about us in our history is about people.
Our people is our greatest asset and our clients and that relationship we have with them. Quite frankly, if you wanted to get mad at me and say I should have put people right in the middle, I probably should have. It deserves as much prominent and weight as analytics. But really that's what I see. The other areas, I guess as I learned from word clouds, it supposedly smaller words might mean that they're less important.
I don't think so. I think they're just they go around the ecosystem, it's our anchors or pillars, our services, people, analytics, our capabilities, that's something I love to talk about, our capabilities because it's a little bit more encompassing the products and services and our people. It's the capabilities that we bring to bear and how we partner with clients and extend and enhance their capabilities with ours and that's where 1 plus 1 equals 3. Workflows, feeds, APIs, artificial intelligence, all those things are important and they enhance our analytical capabilities, they enhance our technology or they enhance the services that we bring. So that's my attempt at a word cloud for the younger generation and that's my belief in FactSet and who we are and the opportunity that sits in front of us.
With that, I thank you for your time and attention. There will be a break now for 15 minutes and when we come back, you'll hear from our CFO, Mauricio Niccoli. Thank you very much.
Told you I think you should guess
Ladies and gentlemen, we will begin in 5 minutes.
Hello. It's me. I was wondering if after all
Ladies and gentlemen, please welcome to the stage, Maurizio Nicolelli.
Okay. Why don't we get started? Welcome everyone. Welcome to Investor Day. Good morning to everyone.
So we're going to start the financial update and I was going to cover 3 areas today, actually 4 areas I should say. 1 is, I'm going to take a look at where we've been over the last 5 years. I'm going to take a look at also our short and medium term goals. I'm going to review the slide that everyone's been waiting for to see how we break up the $1,300,000,000 in ASV. And then we're going to talk about capital allocation, kind of the way Phil and I think about how we allocate our capital overall.
So the first slide here is a slide that I use when I talk to employees at various company meetings. I always want to reinforce where we have been because it really shows how well we've executed over the years and also how well we've done as our employees work very hard in terms of building up the growth in FactSet. If you look at our last 5 years, ASV has grown 57% over the last 5 years as of the end of February. That's half that's $500,000,000 in ASV growth over that period. Dollars 370,000,000 of that is organic.
So overall, ASV has grown 57%. The $370,000,000 equals 43% growth organically over that period, which really shows how well we've executed over that 5 year period. If you look at adjusted EPS, adjusted EPS is up over 80% during that period on a last 12 month basis. And so how did we get there? 1, through organic ASV growth that we just talked about.
2, is really leveraging our acquisitions over the past 5 years and we've done 9 acquisitions over that 5 year period. 3 is really maximizing our effective tax rate. So if you look at our effective tax rate 5 years ago, it was over 30%. Now, our effective tax rate is below 20%. So, a significant change there.
And then 4, the 4th item that's really driven our adjusted EPS is our share repurchase program. We have spent over $1,400,000,000 over the last 5 years in repurchasing over 10,000,000 shares during that period, which has really helped to drive adjusted EPS growth. And what that all translates into is our share price doubling over the last 5 years. If we look at our short term goals or short term guidance, we came out with annual guidance back in December, which we really wanted the investment community to start thinking about FactSet in terms of guidance on an annual basis. Our quarters are choppy.
If you looked at the Q1, it was a very choppy quarter, but the business rebounded and did very well in the 2nd quarter. So there are really we want everyone to really focus on annualized numbers. If you look at our annual guidance as of the end of December, we made some adjustments to it over in the past quarter. Our key metrics, ASV growth and also revenues and our adjusted operating margin were unchanged from what we guided to as of the end of December for the full fiscal year. We did have a number of one time items, both above the line and below the line, especially in tax line that we in which we had to adjust our GAAP operating margin, also GAAP EPS.
And then we also positively benefited from the tax reform in terms of our effective tax rate during the period. And then also we positively impacted our adjusted EPS up because of the tax reform that came through. If we look at our first quarter or first half results and we look at the midpoint of our guidance, we're very confident that we are in very good shape to at minimum meet the middle of our guidance. And if we look at the kind of the 3 key metrics for us, this is where we get our confidence from. The first one is ASV growth.
We did $27,000,000 in ASV growth organically in the first half of the year. If our midpoint of our guidance is $75,000,000 remember our guidance was $65,000,000 to 85,000,000 dollars in ASV growth for the fiscal year. Dollars 47,000,000 is right in line with very similar to what we did last year. Last year, we did $42,000,000 in ASV growth in the second half. So that gives us a lot of confidence that we can meet at minimum the middle of our guidance during the second half of the year.
Adjusted operating margin was 31.6% in the first half of this fiscal year. If we continue to go to perform at 31.7%, we will hit the middle of our guidance, which we're very confident in terms of meeting that middle of the guidance of that metric. And then adjusted EPS, we did $4.15 in the first half of the year. In order to meet the guidance or middle of our guidance, we need to do another $4.30 in the second half of the year. Keep in mind, we did $2.12 in the second quarter.
So just doubling that number in the second half gives us a lot of confidence that we will meet at minimum the middle of our guidance that we published.
All
right. So this is the slide that everyone has been waiting for. $1,300,000,000 in ASV as of the end of August in 2017. $456,000,000 of that is our analytics suite of products, which is slightly more than a third of our overall ASV. And as of the end of February, our analytics suite was growing at 6.7% and that was really driven by all of our from PA, performance, risk, all of our core analytics suite of products.
If we look at CTS, CTS is almost 10% of our business at $124,000,000 It is our fastest growth area in terms of our workflow solutions within the business. It's growing at 20% plus currently for the overall business. If we look at wealth, wealth is at $130,000,000 of the overall $1,300,000,000 and that is growing at almost 8% on a year over year basis at the end of February. And keep in mind, wealth also incorporates FDSG. So FDSG is about half the number.
And if you go back to when we purchased FDSG back in April of last year, it was $63,000,000 that we added in ASV from that purchase and that's incorporated in the $130,000,000 The other piece of the $130,000,000 is really our wealth sales to the higher end of the wealth market. And then the last piece here is $607,000,000 dollars is our combination of research and portfolio management and trading solutions. And that incorporates about just slightly less than 50% of the overall ASV and that is the piece that's growing around 1% on a year over year basis. And that really incorporates our banking business, portfolio management solutions areas and includes our trading solutions Fortwear. That's growing at 1% right now and that's really the area that's facing a lot of the headwinds in the industry that everyone talks about currently within our industry.
And that's the area that's the slowest growth for us currently today. These metrics are this is the breakdown of ASV as of August 31, 2017. We will update this as of the end of August 31, 2018. So we'll be providing this breakdown on an annualized basis. And again, the reason we're doing that is because it's very choppy on a quarterly basis.
And so the next time we will update this will be at the end of August of this fiscal year. And same with the growth rates, we'll also update those growth rates at that same time. If we look at our medium term goals, going forward and when we Phil and I think about medium term goals, we think about the next 2 fiscal years. So when we talk about medium term goals here, we're thinking about fiscal 2019 and fiscal 2020. When we think about organic ASV, we look at organic ASV as growing in the mid single digit area in terms of growth rates.
And that's very similar to where we are today. But I think when we look at that, Phil and I have taken a bit of a conservative approach to ASV growth. There's a lot of product that's coming to market and we do believe that there's additional growth there that could accelerate us further than from mid single digit growth going forward. Adjusted operating margins, we do believe that we can increase our adjusted operating margin by 100 basis points per year for the next 2 fiscal years. So that's really bringing us from around 31.6% to right around 33.5% by the end of fiscal 2020.
Our margin, we did invest a bit more this most recent quarter and you did see our margin come down to like the mid-thirty 1.5% range in the most recent quarter. But one thing to keep in mind is that we do believe that there's leverage in this business. And how do we get there? We get there from organic ASV growth and we get there also by leveraging our existing acquisitions to bring up their margins going forward and also through automation a lot of what Gene talked about within his presentation. We should start to reap those benefits going forward.
And the last item here is adjusted EPS. We have always thought of FactSet being a low double digit growth EPS company, whereby we are consistently performing or growing adjusted EPS in the low double digit growth area. And how do we get there? We get there from a lot of what I just talked about in terms of organic ASV, leveraging our margin to increasing it 100 basis points per year for the next 2 fiscal years. It's also through maximizing our effective tax rate.
Keep in mind, our effective tax rate, the benefit we got this year is 812ths of the benefit because the tax reform bill started January 1st. So we get 812ths of that benefit. In fiscal 2019, we will get the full benefit from maximizing our tax benefit from the tax reform bill. And then also from share repurchases. If you noticed in our last press release, we increased our share repurchase program by another $300,000,000 bringing the total to $431,000,000 being available for repurchases and it's our goal to spend between $325,000,000 $375,000,000 in share repurchases over the next 12 months.
And that's a $100,000,000 uptick and it's really the result of being able to repatriate $100,000,000 from overseas cash that was sitting overseas that we can bring back to the U. S. And the biggest value that we get today in terms of that cash would be to from repurchasing shares during that period. Let's take a look at capital allocation. And when we think about capital allocation, we still remain very disciplined and we still look at capital allocation the way we have looked at it in the past.
Keep in mind, the most recent quarter we generated $315,000,000 in free cash flow. That's the highest amount of free cash flow we've generated over the last 12 months in any period in FactSet's history. We still have $575,000,000 in debt on our balance sheet at a cost of capital of slightly less than 300 basis points. So our cost of capital is still very low. So there's still plenty of opportunity to use our existing cash flow for a number of different areas to maximize our shareholder value.
So when we think about capital allocation, there's really 4 buckets. 1 is business investments. And there's really 2 areas where we allocate our capital to. One is to grow top line growth. That's where we go through our investment process during the middle of every year, usually in late spring.
And we really look at where are the areas that we're going to invest for the next 12 months. And that's really that investment for the next 12 months really is top line growth, not just for the next 12 months, but really for the years thereafter. And what are some of those areas? And there's a lot of those areas we've already touched on today. It's analytics APIs.
It is FactSet OEMS. It is another example is FactSet Open Marketplace. Like those are the areas that are just examples of areas that we are investing in to really drive top line growth. Then there's also investment in the core infrastructure. By adding $500,000,000 in ASV over the last 5 years, the company is transforming itself every 5 years and becoming that much larger and we have to make implementation of Salesforce as our CRM for the whole company globally.
Acquisitions. Acquisitions, we still remain very opportunistic in terms of looking at companies. We are in a very nice spot in that anything that comes to market in our industry comes in front of us now given our size. We're still very opportunistic in terms of acquisitions. It's really to drive top line growth and it's really focused around content and technology.
And those are really there's a number of different areas that we think about, but those are really the 2 pillars that we think about when we look at M and A opportunities. Dividends. Dividends have been very consistent over the years. If you look at our dividend increase as of the end of May of 2017, we increased our dividend by 12%. If you look at our CAGR over the last 5 years, dividends have increased 13% over that time period.
So our dividend policy and plan has been very consistent over the years. And then the last area is really share repurchases. If our cost of capital is still low on our debt and there's not a significant acquisition coming towards us or that we're looking at. Really, we have a significant amount of cash flow that the business is generating and the best area for us to invest in is for shareholder return is really share repurchases. And that was evident in the last press release that we issued and that we increased our share repurchase program fairly significantly from what we've done in the past because it really is at the end of the day very accretive to overall shareholder value.
So just in closing, just a few things to think about. We believe we've been very successful in each of these areas. We've heard throughout the day what makes FactSet a great company, what makes us different and also why we win. There's plenty of investment opportunities out there for investment professionals, but we do believe that we have successfully hit a number of all of these areas and that makes us a very good investment going forward. We want to thank you for being a shareholder and also thank you for considering FactSet as an investment.
I think now we're going to bring Rima back up to the podium and we're going to take Q and A.
All right, people. So we're going to get started with questions and answers. I've got some mic runners. I see some hands going up in the air. Just give me a minute.
When the mic runner comes up to you, please say your first and last name and where you're from. It would help the people on the webcast. So we'll go to that one first, Lauren. Thank you.
Hi. It's Peter Appert from Piper Jaffray. So a couple of questions on the pricing environment, Phil. Obviously, it's a very competitive environment. You've highlighted this.
This is the pricing environment. I'm just wondering if you have any new or updated thoughts in terms of changes you're seeing in the marketplace, how you address and deal with these pressures? And then specifically, one of your competitors been talking about a move from seat based pricing to enterprise based pricing. I'm wondering if that's something that's relevant from your perspective.
So I'll answer it this way. So it is competitive out there. It continues to be more so. And when we go to market with our workflow solutions, we have a great product suite, which you saw on display today. There's more that we have, but you saw a good portion of what we have.
I think when we're going into our larger clients to upsell them, we're really talking about everything that they have from other competitors as well as what it is they're building themselves. And we're our approach to enterprise selling is really to go through that process with the client. They want to partner with us, they trust us, and just coming up with a value proposition that works well for the client.
How about today versus 6 months ago or 12 months ago in terms of the environment?
Yes, I don't think it's changed that significantly. I would say over the last number of years, we've been operating in a similar pricing environment.
Toni Kaplan from Morgan Stanley. I wanted to ask about the index business. I wanted to see what you think the total opportunity there is for you. Do you think of yourselves as disruptors in the index business? Would you look to do acquisitions there?
And like basically, is that the biggest driver of the analytics revenue as well? Thanks.
It's a new sort of niche area for us, honestly, Tony. It's not an area that historically we've thought about investing a lot of money in to compete with the other index providers that are out there. But where we are seeing success is with the alternative data sets that we have and providing those to people that are creating indexes or ETFs and being kind of the engine behind that. So I think that's where we see our role today. We see ourselves as pretty Swiss in that regard when it comes to indexes and just doing the best job we can to integrate everything that's out there for our clients and then pump it through either our platform or directly into their platform.
So that's it's a very small piece of the analytics business today.
It's Manav Patnaik with Barclays. So just a question on the margins, right? Historically, you'd almost talked about keeping margins flat. It sounds like you're spending in CRM, you're spending on a lot of these new products. And the FX has turned a negative as well and you're still guiding to 200 basis point margin expansion.
So I was just hoping you could elaborate a little bit more on where that leverage has suddenly changed?
I think the when you look at our margin and the opportunity there, it's we're not done leveraging acquisitions going forward. And we were very successful with the Porger acquisition, and we have some very number of goals that we want to get to for both FESG and Viasand. So that is an opportunity for us. I think a lot of what Gene went through in terms of automation is going to be significant for us because what that translates into is a reduced amount of headcount going forward to a certain extent. I think those are really 2 big areas and it's leveraging our workforce and getting the right balance between having S.
And Europe and having employees in a lower cost area.
So maybe just on the automation part, maybe I read the initiatives on all the technologies as early stages. It sounds like it could be much quicker than that because I guess your guidance was next 2 years, right? I thought maybe you'd start seeing a lot
of the benefits only sort of in year 2 or so.
Yes, I think it's a steady approach for the next two fiscal years. I don't think there's a big bang to increasing margins, but I do believe there's steady progression over the next 2 fiscal years. And that's why I termed it as medium term, not long term because we're really thinking about just the next 2 fiscal years right now.
Alex Kramm, UBS. Maybe this is a question that ties into the margin, maybe it's something for John. But just wanted to come back to the Client Solutions Group, I mean, 1,000 people you said. And I look at some of the numbers like 20,000 queries a month, 42,000 visits a year. Those sound impressive.
But then I did the math and I was like, wait, that's like a little bit more than 1 query pair client solution person a month and less than one visit a week. Maybe I got those numbers wrong, but it seems like and I know you're proud of it, it's a very big organization. So is that part of the margin question too? Do you think there is just too much service out there? Or why am I understanding the numbers wrong?
Do you want to answer that one,
John? In the Global Client Solutions area, right? Those aren't all what we call client support or client user support who are actually taking the inbound question. So you really got to take that down to a lower number, right. There's a great number of those are doing implementation, integration, they're the analyst consultants, they're not taking the inbound queries, etcetera.
So 1,000 is the wrong number, 1,000 is the right number for what the population is, but it's not the population that's actually taking what we call client user support those calls.
Yes, and there's an evolution there. So I think there are things that took a long time to kind of help clients with previously that we can automate and much make easier for them. But our solution is becoming more complex. So at the high end, we need to, I think, stretch out the capabilities that we have in that group. So I think there may be some room in sales, but I think in the short term, no more than the rest of the organization.
We go to the back floor.
Hi, Joe Foresi from Cantor. Thanks for the four business lines, but I had a couple two questions on it. First, are those 4 set business lines or do you feel like there could be some movement around the definitions or other business lines could develop over time? And secondly, since you gave us growth rates in percentages of revenues, any idea on what your expectations are for those growth rates and going forward?
Maybe I can provide a little bit more color on the business lines. So what you didn't see there was workstation broken out. So 4 of the business lines have workstation in them for the different types of users that are relevant for that particular workflow. The one that obviously doesn't have it is the CTS business, which is more off platform. So I do think that those groups are going to go through a little bit of an evolution in terms of the product suites that are in there.
And one of the things that makes FactSet fun is problem solving. And we are a pretty heavily matrixed organization. There's a lot of shared components and shared content that go across these businesses, which is frankly why it's taken us a little bit of time to get you the numbers that you asked for. So we think we've done a good job of that measuring it internally and breaking it out. In terms of the future looking growth numbers, I don't think we're going to kind of provide that today, as you probably expected when you asked the question.
Keith Housum, Northcoast Research. I appreciate the color you guys gave us there. The trading platform
is buried within the research. I guess, is there a logical why they're buried together? And perhaps can you provide any color in terms of how trading is performing compared to the rest of that research segment?
So trading is still performing well since the acquisition and it's growing at a faster rate than the rest of the company. We're not going to break out the exact number. But yes, you're right, it makes sense to put those groups together. It's a lot of the front office professionals that FactSet has today. A lot of our workstation business is in that group.
The other group that has a large number of workstations is the wealth business.
Thanks. Glenn Greene from Oppenheimer. I just want to go back to the mid single digit ASV growth. I guess I was a little surprised that the key conservatism given the business mix presumably is moving toward the better, meaning you're now less than 50% of your ASV is kind of growing at that 1% or so. And given the answer to the last question, research sounds like it's probably declining and PMT is growing at a pretty good clip.
So you've got to get more of the business growing at a fast clip. Is it further deeper pressure on the research part of the business or the core inherent legacy workstation business? Or is it just trying to rationalize why the growth is somewhat slower? And you had talked about getting back to high single digit and obviously you're taking that parameter off the table for the next couple of years. Yes.
So couple of things. One is, as Maurizio mentioned, we're seeing the most pressure that we see when we talk about active to passive is in the front office and on the workstation business. And it's in there. It's not just it's research, but it's also portfolio management and trading. But we do view there as being a huge opportunity for us there in terms of further growth.
And we're just being conservative. A provide what we think of a 1 to 2 year growth rate is hard. So I think we've taken a conservative approach. What you've seen in terms of the product that we put on display today and all of the other investments we're making, we're confident that that's great product. We can't predict whether or not the headwinds will increase or not.
But I definitely think there is a strong thesis for us getting back to high single digit growth. It's just a question of timing.
So to follow-up to that would be, what would be the
key variables to drive you back to that high single digit growth?
So I think it's stability, right, within the seats and being able to continue to grow those. It's the continued acceleration of the CTS or off platform business. And it's not just CTS, it's really opening up our platform across all of the different groups to provide value on content. So I don't think of our off platform business anymore as just data feeds or even the data exchange. But when Rob talks about the analytics API, 5 or 10 years ago, we wouldn't really have been even thought about opening up the analytics API to clients.
We would have been afraid of it sort of cannibalizing our business. But we now realize that's not the case that clients that want it from us aren't interested in taking that to basically offset the cost of other things they have. It's just to receive the value that we provide in different ways. So I think that's a big opportunity for us. We can now unbundle the workstation.
So you may have heard us talk about FactSet views, but the way that our investment has created the platform, essentially, we can take any view on FactSet and put it into a client's environment or create sort of a custom experience for them. So that's exciting as well. So I think the rapid adoption of sort of our off platform business is going to, I think, be another key component in our growth. The continued acceleration of our or growth of our analytics business, risk, that's an important one. And I think we still have some work to do in terms of filling out the content to be truly multi asset class.
That's something we continue to focus on as a company. And the wealth business is doing fantastic. So I think the addition of IDMS, what we call FDSG to our existing wealth business, which has done really well at the high end of the market, and the work that we've done with FactSet Web really now opens up. When I talked about the total addressable market, the wealth business that some of our competitors have is now really open to us, whereas previously it wasn't. It was a scale issue that we didn't want to tackle at a price we didn't want to tackle, but that's not true anymore.
So that's a very exciting piece of our business. And you can see that it was growing or is growing at a pretty good clip.
Just real quickly, what is at a high level the business model for Open FactSet? Is it just the data feeds or how do you get a share of a
We're still thinking about that, but there's lots of different options, right? You can have a usage based model, for example. So for the analytics API, you can charge based on the number of units or whatever that somebody is consuming for our feed business. It varies depending on the value of the content and how much of it we're sending and how many people are consuming it. So a lot of variables go into pricing off platform.
It's a more difficult equation than just providing the workstation, but it's all based on value. So we think about what is the value the client is getting, how much would it cost them to do it themselves, how much would it cost them from a competitor in getting the most value we can for that solution.
It's Shlomo Rosenbaum from Stifel. Phil, just a question for you. I guess Maurizio also, historically the company has not really talked a lot about margin expansion. The company is really much more focused on top line growth. And a lot of times there is a growth margin trade off over there, you're going to invest more and you can grow faster.
Could you do that? If you kept if you decided you didn't want the margin to go up 200 basis points and stuff like that, could you drive the top line faster? Or for the organization as it sits right now, this is just a healthy way to do it because you can throw a lot of product, but in terms of pacing the growth, the organization can't really handle it at that point. You just Yes.
So that's an important point. We do want to one of the things that we've been consistent on is delivering double digit EPS growth for our on top of all of that, we do feel that there's a lot of efficiencies to be gained in our business. And because we have been so centrally managed historically and we've not had the greatest sort of business intelligence for different groups to utilize, I think there's still a lot of room to invest in high ROI products or opportunities while gaining margin expansion. And the work that we've done internally to align ourselves and have leaders around these different businesses and put the development teams and the strategists directly in them is starting to result in what we see as some really good results in terms of making the right bets on products and sort of de investing or investing less in some things that had a lower ROI. So all of that is sort of our thesis in terms of how we think we can drive some margin expansion while continuing to put out products at a faster rate than we had historically that can drive the top line.
Just a follow-up and just taking different tech. Can you talk a little bit more about the lower side of the market in terms of addressing like the FAs that are out there that you're you think that the market is now open. How aggressively are you going after that? And exactly how are you selling that if you talk about a lot more, because there's a lot of workstations out that way. I know it's obviously lower dollar value, but maybe you can just talk about how you're thinking about that?
Yes, I think that's a good one for John to chime in on.
I think the answer is really as we're just looking with FDSG, IDMS, right, talking about the products that we have with views, our move from the technology to a completely web or HTML based application. Now we can deliver discrete bits, right, of that workspace. So it's not such a heavy drop, if you will. So we're able to scale the offering to meet all the different sections of that market. When you look at private client wealth and then down more to what I characterize as more retail, our ability to do that.
So the product allows us to do that and the sales force will now be aligned in that way as well. I don't know if I would use the word aggressively. We are pursuing it. We're kind of getting the product positioned properly and looking to address that marketplace. And that's still kind of integrating the sales forces from FDSG and FactSet.
But it's clearly an initiative that we're doing. There are large opportunities. The pipeline is there. I just would hesitate to leave you with the wrong impression if I use the word aggressive, I'm particular about words.
We're getting several great wins both at the low end of the market with smaller shops, but also some what's driving that growth rate is a lot of people using
FactSet Wealth Workstation.
Brian Alexich from Greenwich Investment Management. Question on your competitive landscape. Thompson Reuters and Blackstone have announced this partnership. You have a competitor that had a reputation for sort of poor management or service that presumably should resolve some of the principal agency problems that they've had and be a little bit more competitive. How or can you share your high level thoughts on how this may impact your sales strategy and how that has played into all the things you've shared with us today as far as margins and growth expectations?
So I think the impact is not significant over the next few years. I think there probably a positive for us frankly and that we see that there'll be more disruption and turbulence within that particular competitor. We've been competing on or they've been competing on price with us for a long time. So for years years years, we'll go out and we will provide a better solution to our clients. Very often, they will be interested in FactSet, and hey presto, the price of the competitor's product may go down by 50% or something.
And sometimes we'll win those and sometimes we'll lose them. So I don't think we'll see anything different than that honestly than we have historically. Obviously, things will change. Are different views as to why the acquisition was done and which assets will be leveraged, but it's not one that we're concerned about in the short term.
It's Kevin McVey, Deutsche Bank. Thank you again for the additional disclosures. I wonder if you can give us a sense of the margin profile at each business relative to the corporate blended average. And then as you look at those 200 basis points of expansion, what segments would you expect to contribute most as we think about the next couple of years?
Okay. So as Phil said before, we're highly matrixed. And those are not those are workflow solutions and we bucket them into ASV. But when we look at the cost, we're still highly matrixed, right? And so there's a lot of cost that is shared between all four of those groupings that we had there.
So they're not distinct separate business lines today that we measure all the way down to a margin profile. If I look at it, some may be more profitable than others. That's correct, but I don't think we're ready really to go down to that level just yet.
Alex Kramm again, UBS. I think for you, Maurizio. You talked about M and A as like number 2 capital allocation. You've been a lot more acquisitive in the last few years. So just curious how you actually measure the performance of those acquisitions.
I don't think you've done that in terms of returns or IRRs, anything like that. And maybe also the criteria going forward? I mean, again, like you've become more acquisitive. You've backed out some of the acquisition costs, moved different reporting. It's just very hard to measure like how good you've actually been at doing these acquisitions.
So maybe a little bit more color if
you have it. Yes. So when we do an acquisition, we go through a process to really measure out where we want to be within 2 years in terms of ASV growth with this acquisition. And when we buy something, we're really thinking about 1 plus 1 really equals 3 in terms of growth to really accelerate growth going forward and why we did it. And so one of the measures is ASV over the next 2 years.
And then we also look in many of these acquisitions that we've done, their margin is much lower than the rest of FactSet. And so we have a plan to get that business or that group of costs or that business back to the FactSet overall margin profile. And by doing that, we're calculating also a general rate of return for us to be able to measure whether or not we've gotten to where we needed to be, right? We really look at this in terms of 2 to 3 year increments to really get the acquisition to where we want it to be over that period. And included in all that is also integration goals, whereby those are separate goals that will have also a team of FactSet people, especially in the engineering product development area, really integrating that acquisition into the rest of FactSet.
And we've seen that with Portware, we're doing that with Fisem, Vermillion, Symba, all of them have very similar goals in terms of where we want to get to at the end of 2 to 3 years. With the recent ones, yes. Yes. If you looked at FDSG or BiCM, it's too early. Both are performing well.
But again, they're nowhere near that 2 year mark just yet.
Mark Lane from William Blair Investment Management. Can you talk about the size of the growth of the fixed income business? That's not something that you've talked about distinctly today.
Yes. We don't break it out specifically, but I think I'll give Rob an opportunity to talk more general terms about how that business has been trending.
In terms of fixed income, the multi asset class experience. So what we're seeing there is we are being able to sell into fixed income only investment management firms or buy side clients. We're also able to further expand our relationship with our equity clients that have large fixed income investments. It's also helping us, as I mentioned in the previous presentation, in the Sovereign Wealth Fund and the insurance community as a lot of those assets are co blended. So it really is it's helping drive our business into new areas, into new areas of firms, and it's also getting us into opening up larger opportunities in areas of markets that we normally didn't try to participate in.
Is there you could have chosen to as you said, these are not distinct businesses. These are this is just a disclosure framing that you've provided. Why did you decide to segment the business in the way that you did? I mean, why didn't you break out trading, fixed income, for example, has been an area
Yes, it's a great question. So we've agonized over this for years, right? Do you break it up by geography? Do you break it up by client type? Do you break it up by asset class?
At the end of the day, we view ourselves as a workflow solutions company. We thought about all of the different user classes or user types that use FactSet. And there's probably, I'm estimating here, let's say, there's 40 of them, right, that we categorize. So within our CRM, anyone that uses FactSet is one of these 40 types. And then we bucket them into these different workflows.
So there are lots of different options to us. We really looked at the ones that we thought made the most sense to us in terms of how we develop product, how we go to market and what the opportunity is. But not because of how highly matrixed we are, it was not an easy problem to solve.
Can you talk a little bit about street account and your investments in more proprietary content in the forms of interpretation, things like the summary of sell side analyst notes.
Where do
you think you'll go with that? And are you investing in what you would consider?
Yes. So StreetAccount was a tremendous acquisition for us. When we acquired StreetAccounts, it was really a U. S. Only product.
We've done a lot to invest in the European and some areas of Asia for that. It's an area that we view as further opportunity if we continue to invest. For the 1st year or 2, we really kept kind of a dedicated sales team to sell the web only product. That's not the case anymore. And you see a little bit of that reflected in our earnings call.
But what you don't see really is the adoption and usage of street account by the other 80,000 people that have faxed on their work stations. So we've really focused on driving the street account experience through the workstation and web product, building out global coverage. And I think we've got a unique model there in terms of how we approach it versus some of our competitors, which is why it is such a successful product. And it's an area that we do believe if we continue to invest in, we would get greater leverage for us. And when we think about addressing the needs of the front office, news is obviously one of the things that we want to continue to build out.
But we're not going to do it by investing a huge news organization. We're going to do it by making smart decisions about integrating third party content, alerting you on things you care about and investing in the street account area.
Okay. And then an unrelated follow-up on your success within the Asia Pacific market. Where is that stemming from? Is it stemming from a market dynamic where those regions are investing more globally? Or is it a product of less competition in those markets?
Kind of where is the success coming from and what's it attributable to?
John, you
want to
ask Greg
to take that one?
I think part of it is just becoming more and more well known in that region and area where historically we been a known player. As our products have grown certainly with risk performance etcetera, you continue to see a large appetite for that. But it's the normal suite of products that you see are doing so well across all the other regions is analytics and CTS. Our unique content has been very successful. We were very strong in Japan and you want to think about some of the sub regions, but across APAC with our unique content, which then goes to CTS, our analytics suite.
So it's a lot of the same themes and strengths that you see that parlay across regions. I think what you see in APAC is a greater awareness of our brand and recognition as we've grown. That's predominantly what I would say is obviously is a stronger wealth presence there. That is an area in Shlomo where we are tapping into and where there's opportunities. So it's some of it is being opportunistic and seeing where the nuances of the marketplace, but in many ways it's still continuing to sell and grow to sell what we have, which has been very successful, which is the analytics and CTS Suite.
This is David Chu from BofA. Just wanted to if you can discuss the selling environment post NYFID. And if January looks largely similar to April or have you seen changes over the months?
Thanks for the question. So I might defer to John here if he has further comments. But I don't think we've seen a big difference frankly in the selling environment in Europe. We definitely check-in obviously with the leaders of the different regions there. But it's for us, I don't think it's been any different than 6 months or 12 months ago.
Yes. We haven't seen any dramatic shifts in business process or business behavior, purchasing behaviors. It's been fairly consistent. January 3rd, I think everyone is still digesting. I think there's still some consultative paper still out.
We're still trying to formulate what actually the full effect of MiFID II is, how that trickles throughout both the sell and the buy side. So, at one level is early days, haven't seen any real demonstrable impact. We keep an eye on it for sure and we'll stay tuned.
Can we give it to Manav please here?
Thank you. I just wanted to understand the assumptions in the mid single digit ASP ASP growth a little bit more. So it sounds like your conservatism is going to be is on stuff like OpenFAX and maybe some of the new stuff you put out that you're not sure how quickly it ramps. And then from an industry perspective, all the headwinds you talked about like consolidation active to passive and so on and so forth, like what have you assumed with that? Is that status quo?
Does that get worse? Just some help on what broader industry backdrop you've baked into that mid single digit growth rate?
Yes. So we model out for all of the different users that I just mentioned what our key assumptions are for the growth of those particular groups and how much they'll be paying per unit, as well as the growth of the products that we have out there. So I think we do continue to expect to see some pressure in the front office for portfolio managers, for highly priced research analysts. I think the present company excluded. But yes, so we're just being conservative.
And there is pressure there for you all know like 10 years ago, you might have had 2 or 3 or 4 different products on your desktop, you're now probably being forced to have 1, 2 if you're lucky. That dynamic, I think, is going to continue. And we're just we're being more conservative on that side. And I think optimistic in terms of what we can produce in terms of product that will sell by itself on top of existing workstations, but also drive new workstations. So the demonstration that you saw from John and Josh, for those of you that know our product well know what a significant step forward that is for us and new types of users that traditionally would not have used FactSet, we now have a lot more market share available to us.
So we see that as being a real enhancement to existing portfolio managers of FactSet, but also potential reason another reason for us to win versus an incumbent to get on that desktop. So the adoption of that and how quickly that is will have a big impact.
Hi, Tim McHugh, William Blair. Just kind of tied to that, the 1% growth in research and portfolio trading, I guess, if we I know you don't want to say going forward what you are assuming, but if we went back a year or 2 or 3, what was that growth rate? Is that the normal? Is that what you've been seeing for a while? Or has that slowed down in the current environment?
I think we're going to break it out exactly, but I think it's been pretty much like that. So we've been steady on workstations. You've seen us grow our workstation footprint, but I think what you're probably seeing there is some higher priced users come off and some other types of user classes grow that have a lower cost per seat. And our analytics and feeds business has been growing and wealth business have all been growing really well, which has been sort of driving the difference.
Any more questions? We've got time for a couple of more questions. Let's go to Peter first. I'll come back to you, Alex.
So Phil, the company has been a little bit more active from an M and A standpoint in the last couple of years. Do you see the need for any meaningful further M and A in filling in any white spaces? And maybe you could identify where the specific opportunities you think are going
to Yes. So I think we were very intentional about going out and acquiring a couple of pieces that we didn't have. So execution and order management and the performance system, those are things that we set out to go get. And we sort of taken a step back now to say, okay, let's get that software integrated in that workflow to fill out the portfolio lifecycle. What's still missing for the portfolio lifecycle is more content and that's going to continue to be the case forever probably as the needs and markets.
That's something that FactSet has not really focused on much in our history, but that would be an area of interest to get integrated. When we go to the large asset owners now and the sovereigns that are using our multi asset class risk model, a lot of them own private companies, they own real estate. We have solutions for that today, but we could continue to advance what we do there. And we see large institutional asset managers now getting more into private markets. So we're already in there.
Rob mentioned the 4,200,000 portfolios. Most of those are public companies, but we do see an opportunity there in terms of white space. We don't think anyone is really solving that problem well, frankly.
So we'll take our last question from Alex Kraum.
Well, then I'll ask 3. No, actually I have 2. I actually have 2 quick questions.
We're allowed to, Alex.
No, I actually have 2, but the first one is really quick. Just at the beginning, Phil, I think you said something about a 1000000 addressable users' terms. Screens. Screens. Screens.
Yeah. I think a couple of years ago at an event like this, you said 700 to 800. So is that I don't think the market has grown as much. Is it just because you have a bigger addressable market?
I think if you add up the 3 obvious main competitors, you get to 7 or 8 pretty easily. And then there's lots of niche providers. So John John's slide, I mean, there's wind in China, there's Iris in Australia, there's a lot of screens globally.
Good. So thanks for that. And then just coming back to the whole workflow versus workstation. Just I don't know if you can flush out if it's a different approach with different clients because it sounds very good like it's your one stop solutions shop now, but your clients are very complex organizations, right? So you're not going to solve everything for everyone.
So maybe just a little bit more color in terms of is there actually an approach that there are smaller companies where you actually going and saying like, listen, rip out everything you've done, we're going to do everything now from you or
That would be
It's the perfect environment, right? Like how is it a different approach and how is this really just sounds like a great story, but at the end of
the day, you're still going to have single solution that you're trying to get into. So the slide that Jon Adams showed, right, which was what a trading workflow looks like for clients. So we actually go into clients, we have a team that goes down and we map that out basically. So we map that out for clients And we talk to them about different areas of that business. So within these different workflows that we showed, whether it's research, portfolio management and trading or analytics, we can provide a workflow solution for different departments at firms.
We don't have to do the whole thing. But the real opportunity for FactSet really is in our largest accounts today. So it's going in, building on that trust that we have with them and that footprint. And we're not going to do it all at once. You're absolutely right.
I mean to rip out an order management system, an execution management system, a performance system, those are once in a decade or 2 decade decisions for clients. But over time, there's a massive opportunity for us. I mean, you saw the pie chart. So we have less than 5%. If we just continue to do what we've always done well as a company with the new solutions we have, we just think there's a great opportunity for us to continue to grow and execute.
Ladies and gentlemen, thank you so much for being here today. This concludes the end of our Investor Day. And for those of
you listening on the webcast, it
is the end of the show. There is lunch available outside, and we will be outside for about 20 minutes. We'll come and talk
to you if you have any additional questions. Thank you very much.
Thank you very much about 20 minutes. We'll come and talk to you if you have any additional questions. Thank you very much.