New Constructs Builds Data Biz, Taps Former BNY ConvergEx CEO Meserve for Board

New Constructs, a Nashville, Tenn.-based provider of stock and exchange-traded fund (ETF) research and recommendations, is creating a new business line selling the underlying datasets it captures to derive its research, and has formed an advisory board of industry experts to help expose the data to a wider audience.

The efforts are part of a new initiative at the vendor to expand its business, which has grown steadily over the past 18 years since being founded by CEO David Trainer—a former equity analyst at Credit Suisse First Boston—without having a formal sales and marketing function.

Until now, the vendor has produced research based on its analysis of off-balance sheet information relegated to the footnotes of financial statements, but has recently seen increased demand for the raw data itself from the footnotes. Trainer says the vendor was “catapulted” into the data business after being profiled by Harvard Business School and being cited in research by Harvard and the Massachusetts Institute of Technology’s Sloan School of Management.

“If you want to get alpha from fundamentals, you need a new type of research,” created using automated techniques that yield more accurate results, Trainer says. “People see more items getting stuffed into the fine print. We do a better job of categorizing all those data points and filings. … Now we’re selling more of the ‘raw ingredients,’ in addition to the ‘prepared meals,’” he says.

“Now, every quant firm is testing our data, so we decided it’s time to scale the business,” Trainer says. Beyond quantitative traders, he says the company is targeting multiple market segments, ranging from traditional fundamental portfolio managers to compliance officers looking for potential risks in their traders’ portfolios. “The addressable market is everybody who cares about fundamentals. But I can’t match the distribution of the big firms, so I’m looking to partner with other vendors.”

Specifically, Trainer is seeking providers of workflow platforms with a large share of desktop real estate who are looking to add datasets.

To grow its data business, New Constructs has enlisted an advisory board of industry experts who can leverage their contact base to promote its data, and to help the company identify the right partners.

The advisory board comprises John Meserve, Bruce Fador, and Evan Schnidman, and Trainer has identified an undisclosed fourth individual who he wants to join the board.

Meserve is best known for spending 13 years as CEO of ConvergEx Group, BNY Mellon’s research and commission management business, and before that, 10 years in senior roles in the Bank of New York’s international marketing division. He currently serves as an advisor to a variety of firms, including funding and advisory firms SenaHill Partners and Tribeca Angels, and analytics and research technology providers, such as Paragon Intel and ContentStreet.

Fador is founder and managing partner of Fador Global Consulting, which provides advisory expertise to fintech and data startups and growth-stage companies. He previously spent over six years in senior management roles at events data provider Wall Street Horizon, and has served as an advisor to numerous fintech companies, and as CEO of Thomson First Call, WorldStreet Corp, and Weiss Ratings.

Schnidman is currently the founder of EAS Innovation, a consultancy advising corporations on data strategy, and also serves as a subject matter expert at Quinlan & Associates. He was previously founder and CEO of research automation technology provider Prattle, which was acquired last year by Liquidnet.

“The advisory board will be advising me on different fronts, and will be getting us in front of the right people with a product that’s ready to scale,” Trainer says. “I can’t pursue all the partnerships I want to on my own, and I don’t have all the contacts that these people do. I’m looking for folks with high-quality relationships who can get deals done.”