EJV Seeks Redistribution Deals With Other Data Vendors To Carry Its Bond Database

EJV Partners L.P. is finally delivering on its promise to unbundle its fixed-income descriptive and pricing data from the UniVu analytics platform to which it had been wed. The EJV is holding data redistribution talks with a number of other market data vendors--a process that is forcing the EJV to decide whether it is primarily a platform or an information vendor.

Three months after Liberty Brokerage Inc. signed on as its seventh and managing partner, the EJV is close to a deal with a vendor that would develop with it an end-of-day bond pricing service. Pending final negotiations, the service would be offered to institutional investors.

At the same time, among the EJV's seven or so paying customers are a number buying only data, without the UniVu analytical platform. To encourage such use, the most recent release of UniVu includes a toolkit to facilitate customers' access to the database. Such EJV development work is now shared with systems integrator Market Vision Corp., which is wholly owned by Liberty.

The EJV database itself is cleaner: A recent demonstration of the latest release of UniVu, version 3.0, revealed no pricing anomalies or mysterious gaps--both of which were painfully evident in the past (IMT, Aug. 7, 1992).

"We spent a great deal of time on the data side, cleaning and scrubbing the data. Now we are increasing the ease of access to that data," says EJV head of product marketing David Gertler.

The initial move to sell data and analytics separately came after three years in which the six partners forked over a total of some $80 million for the EJV. Some partners, grown tired of undelivered functionality, lobbied for the EJV to use what was already available to generate revenues (IMT, March 5).

However, the EJV, under Liberty's guidance, is still seeking that delicate balance between competitor and distribution partner to other data vendors.

"We are motivated to do [redistribution] deals with our data so long as it doesn't risk destroying our franchise," says Tom Wendel, who is chief executive officer of the EJV, as well as president and CEO at interdealer Treasury broker Liberty.

He adds that he is concerned about control over pricing and about establishing visibility for the EJV brand name. "If Market Vision distributes Reuters [data] to a customer, the customer signs a contract with Reuters," he says. "We want to be sure that any third party is acting as an agent, not as principal.

The issue becomes "stickier," Wendel says, if the third party is seeking to act as principal in selling data.

A third party that wanted to change data schema, augment the data or add value in some other way would be subject to much more serious scrutiny by the EJV than a simple reseller of the data, Wendel says. "We don't feel that we've explored all the answers yet."

One likely candidate to buy rights to the EJV pricing and descriptive information could be Reuters, which might well welcome an alternative bond database to that maintained for its Decision 2000 service, until recently, by Steve Levkoff's Capital Market Decisions Inc. (Inside Market Data, Nov. 8).

However, Reuters earlier this year signed a deal with Liberty rival Cantor Fitzgerald L.P. to carry that broker's non-U.S. government bond pricing data (IMD, Feb. 1)--a deal that intensifies the competitive issues involved in a pact between EJV and Reuters.

A glance at customer configurations suggests the EJV's willingness to offer data and analytics separately, or unbundled, which has been a critical element in the vendor's initial sales. Of the first five paying customers, only one is paying for bundled UniVu service, according to Market Vision president Bill Adiletta.
Of those remaining, two have taken the data and analytics as two pieces, one has bought the data alone and still another took the data with a proprietary back-office interface. Adiletta says the EJV has around seven paying customers at the moment. He declines to name them.

EJV officials emphasize that one of the earlier problems with the system--apart from accuracy and comprehensiveness of data--was the difficulty in getting access to the data.

"Part of the resistance to the system in the first place was that the openness wasn't there," Adiletta says. "Now we can position ourselves as a vendor of a fairly rich set of analytics, with customers having the opportunity to use the data to write their own applications."

Despite suggestions that EJV headcount would be halved--from about 150 to 70--after Liberty took over (IMT, April 30), staffing levels are currently just over 100. Wendel claims that attrition rates are now normal for an organization of its size. The vendor is now hiring, EJV officials say, particularly in the data quality control area and on the applications side.

Says Wendel: "We lost a number of people--many not through our choice." Wendel says that he feels that the partners were "always committed" to the EJV, but that "that was not always clear to the people here."

Gertler is among the very few senior staff left from the EJV's early days. Also still on board are Dick MacWilliams, who heads sales and marketing and Jim Micelli, chief financial officer. Most of the other original management team members sought--or were asked to seek--employment elsewhere in the months before and immediately after Liberty stepped in as general manager (IMT, July 9).