Morningstar to Bring Together Manager Research and Quantitative Research, Create Chief Ratings Officer

Rhea-AI Summary

Morningstar, Inc. (Nasdaq: MORN) is reorganizing its research structure, effective Jan. 1, 2021. This includes merging quantitative and qualitative research teams and appointing a chief ratings officer to enhance ratings integrity. Lee Davidson will lead these combined teams, while Jeffrey Ptak will assume the chief ratings officer role, overseeing new rating methodologies. Morningstar aims to improve investor services by integrating qualitative insights with quantitative analytics as it expands its investment offerings across multiple asset classes.

Positive

• Creation of a chief ratings officer role to enhance ratings integrity.
• Integration of qualitative and quantitative research teams for improved investment analysis.
• Expansion into new investment types and methodologies to meet investor demand.

Negative

• None.

CHICAGO, Oct. 22, 2020 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today announced a research reorganization that includes bringing together the leadership of its quantitative analytics and qualitative managed-investment research teams as well as creating a chief ratings officer, effective Jan. 1, 2021.

"Investors increasingly have more investment options to choose from, and they rely on our independent ratings and analysis to help make the best choices for them," said Haywood Kelly, Morningstar's head of research. "More tightly marrying our analysts' in-depth, qualitative research with our quantitively derived analytics will help us meet investors' growing interest across asset classes and spur innovation. Furthermore, creating a chief ratings officer will ensure we maintain our high bar for ratings integrity and efficacy as we develop new methodologies and expand into new investment types."

Lee Davidson to Lead Global Manager Research and Quantitative Research
Lee Davidson has been selected as head of manager research and quantitative research, expanding on his existing remit. Davidson has served as head of quantitative research for the past five years, and he was also a manager research analyst for two years as part of his 10-year Morningstar tenure.

"Investors have long benefitted from our analysts' judgment and, as investment options have proliferated and become more complex, the need for good judgment has grown exponentially. We are eager to harness new technologies and analytics to extend our analysts' reach in order to keep empowering investors," Davidson said.

Morningstar provides independent analyst research reports and qualitative, forward-looking Morningstar Analyst Ratings™ for more than 5,400 mutual funds, exchange-traded funds, and other vehicle types globally. In recent years, its analyst coverage of managed-investment strategies has grown to include separately managed accounts, model portfolios, collective investment trusts (CITs), state-sponsored college-savings plans, target-date funds, and health-savings accounts. The firm has also recently introduced quantitatively derived investor tools for managed investments, including the Morningstar Quantitative Rating™, a forward-looking rating launched in 2017 that uses machine learning to assign ratings to more than 39,000 funds Morningstar analysts do not cover.

Jeffrey Ptak Named Chief Ratings Officer
Jeffrey Ptak, currently head of manager research worldwide, will assume the newly created position of chief ratings officer. In this role, Ptak will be responsible for approving new investment ratings methodologies for managed-investment strategies and equities, maintaining Morningstar's high quality and reporting standards for its growing portfolio of ratings, and leading a team focused on articulating Morningstar's best thinking in terms of portfolio construction.

"We know the importance investors attach to our ratings of mutual funds, ETFs, and stocks. I'm excited about redoubling our focus on ensuring the ratings are as usable and effective as possible," Ptak said.

In his more than 17 years with Morningstar, Ptak has served as a senior fund and equity analyst, director of exchange-traded fund analysis, and also president and chief investment officer of Morningstar Investment Services, Inc., a separate investment unit that provides managed portfolio services through fee-based, independent financial advisors. Ptak will also continue to report to Kelly. DBRS Morningstar and its credit ratings will continue to operate separately.

About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The Company offers an extensive line of products and services for individual investors, financial advisors, asset managers, retirement plan providers and sponsors, and institutional investors in the debt and private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with approximately $205 billion in assets under advisement and management as of June 30, 2020. The Company had operations in 27 countries as of June 30, 2020. For more information, visit www.morningstar.com/company. Follow Morningstar on Twitter @MorningstarInc.

Morningstar's Manager Research Group 
Morningstar's Manager Research Group consists of various wholly owned subsidiaries of Morningstar, Inc. including, but not limited to, Morningstar Research Services LLC. Morningstar's Manager Research Group produces various ratings including the Morningstar Analyst Rating and the Morningstar Quantitative Rating. The Analyst Rating is derived from a qualitative assessment process performed by a manager research analyst, whereas the Morningstar Quantitative Rating uses a machine-learning model based on the decision-making processes of Morningstar's analysts, their past ratings decisions, and the data used to support those decisions. In both cases, the ratings are forward-looking assessments and include assumptions of future events, which may or may not occur or may differ significantly from what was assumed. The Analyst Ratings and Quantitative Ratings are statements of opinions, subject to change, are not to be considered as guarantees, and should not be used as the sole basis for investment decisions. This press release is for informational purposes only; references to securities should not be considered an offer or solicitation to buy or sell the securities. 

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©2020 Morningstar, Inc. All Rights Reserved.

Media Contact
Sarah Wirth, +1 312-244-7358, sarah.wirth@morningstar.com

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SOURCE Morningstar, Inc.

FAQ

What are the changes Morningstar announced in October 2020?

Morningstar announced a research reorganization to integrate quantitative and qualitative research teams and create a chief ratings officer role, effective Jan. 1, 2021.

Who will lead Morningstar's combined research teams?

Lee Davidson will lead the global manager research and quantitative research teams.

What is the purpose of creating a chief ratings officer at Morningstar?

The chief ratings officer will ensure high standards for ratings integrity and oversee the development of new investment rating methodologies.

How does Morningstar plan to enhance its investment research services?

By integrating qualitative insights with quantitative analytics and expanding into new investment types.