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Morningstar, Inc. is an American
financial services Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, ...
firm headquartered in
Chicago, Illinois (''City in a Garden''); I Will , image_map = , map_caption = Interactive Map of Chicago , coordinates = , coordinates_footnotes = , subdivision_type = Country , subdivision_name ...
and was founded by
Joe Mansueto Joseph Daniel Mansueto (born September 3, 1956) is an American billionaire entrepreneur; the founder, majority owner and executive chairman of Morningstar, Inc. he is also the owner of Major League Soccer club Chicago Fire FC and of the Super Lea ...
in 1984. It provides an array of investment research and
investment management Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be instit ...
services. With operations in 29 countries, Morningstar's research and recommendations are considered by financial journalists as influential in the
asset management Asset management is a systematic approach to the governance and realization of value from the things that a group or entity is responsible for, over their whole life cycles. It may apply both to tangible assets (physical objects such as buildings ...
industry, and a positive or negative recommendation from Morningstar analysts can drive money into or away from any given fund. Through its asset management division, the firm currently manages over . The firm also provides software and data platforms for investment professionals, including "Morningstar Research Portal", "Morningstar Direct" and "Morningstar Advisor Workstation".


History

Founder
Joe Mansueto Joseph Daniel Mansueto (born September 3, 1956) is an American billionaire entrepreneur; the founder, majority owner and executive chairman of Morningstar, Inc. he is also the owner of Major League Soccer club Chicago Fire FC and of the Super Lea ...
initially had the idea for Morningstar in 1982 while reviewing
mutual fund A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICA ...
annual reports he had requested from several prominent fund managers. However, it was only after a year working as a stock analyst for Harris Associates, seeing the fund industry and potential competitors up close, that he was convinced that the opportunity was there. Morningstar was subsequently founded in 1984 from his one-bedroom Chicago apartment with an initial investment of US$80,000. The name ''Morningstar'' is taken from the last sentence in ''
Walden ''Walden'' (; first published in 1854 as ''Walden; or, Life in the Woods'') is a book by American transcendentalist writer Henry David Thoreau. The text is a reflection upon the author's simple living in natural surroundings. The work is part ...
'', a book by
Henry David Thoreau Henry David Thoreau (July 12, 1817May 6, 1862) was an American naturalist, essayist, poet, and philosopher. A leading transcendentalist, he is best known for his book ''Walden'', a reflection upon simple living in natural surroundings, and h ...
; "the sun is but a morning star". In July 1999, Morningstar accepted an investment of US$91 million from
SoftBank is a Japanese multinational conglomerate holding company headquartered in Minato, Tokyo which focuses on investment management. The Group primarily invests in companies operating in technology, energy, and financial sectors. It also runs the Vi ...
in return for a 20 percent stake in the company. The two companies had formed a joint venture in Japan the previous year. Morningstar's
initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investme ...
occurred on May 3, 2005, with 7,612,500 shares at $18.50 each. The manner in which Morningstar went public is notable. They elected to follow
Google Google LLC () is an American Multinational corporation, multinational technology company focusing on Search Engine, search engine technology, online advertising, cloud computing, software, computer software, quantum computing, e-commerce, ar ...
's footsteps and use the
OpenIPO OpenIPO is a modified Dutch auction which allows shares of an initial public offering (IPO) to be allocated impartially. It is a variation on the traditional way that shares are sold during the IPO process and results in all successful bidders payi ...
method rather than the traditional method. This allowed individual investors to bid on the price of the stock, and allowed all investors equal access. In 2006, Morningstar acquired Ibbotson Associates, Inc., an investment research firm。In 2007, Morningstar acquired the mutual fund data business of
S&P Global S&P Global Inc. (prior to April 2016 McGraw Hill Financial, Inc., and prior to 2013 The McGraw–Hill Companies, Inc.) is an American publicly traded corporation headquartered in Manhattan, New York City. Its primary areas of business are financ ...
. In 2010, Morningstar acquired credit rating agency Realpoint and begins offering structured credit ratings and research to institutional investors. In the same year, Morningstar acquired Old Broad Street Research Ltd. (OBSR), a UK-based provider of fund research, ratings and investment advisory services, for $18.3 million. After the acquisition, renamed as Morningstar OBSR. In 2014, Morningstar acquired ByAllAccounts, Inc., a provider of innovative data aggregation technology for financial applications. In 2016, Morningstar acquires remaining ownership of
PitchBook Data PitchBook Data, Inc. is a SaaS company that delivers data, research and technology covering private capital markets including venture capital, private equity and M&A transactions. It is based in Seattle, Washington, with regional offices in Lo ...
for approximately $225 million. In September 2016, Morningstar announced that it had appointed Kunal Kapoor as chief executive officer, effective January 2017, with Mansueto becoming executive chairman at the same time. In 2019, Morningstar to acquire the world's fourth largest credit rating agency
DBRS DBRS Morningstar is a global credit rating agency (CRA) founded in 1976 (originally known as Dominion Bond Rating Service in Toronto). DBRS was acquired by the global financial services firm Morningstar, Inc. in 2019 for approximately $700 milli ...
for $669 million. After the acquisition,
DBRS DBRS Morningstar is a global credit rating agency (CRA) founded in 1976 (originally known as Dominion Bond Rating Service in Toronto). DBRS was acquired by the global financial services firm Morningstar, Inc. in 2019 for approximately $700 milli ...
merged with Morningstar’s credit rating business。 In 2020, Morningstar entered into an agreement to acquire
Sustainalytics Sustainalytics, a Morningstar Company, is a company that rates the sustainability of listed companies based on their environmental, social and corporate governance (ESG) performance. The company was born of a merger between Toronto-based Jantz ...
, a research and ratings firm specializing in environmental, social and governance (ESG) insights. That same year, Morningstar agreed to acquire PlanPlus Global, a Canada-based financial planning and risk assessment software company. In 2021, Morningstar announced it would acquire the UK and international (including Jersey, Hong Kong and Dubai) operations of the Australian wealth management platform Praemium (ASX: PPS) for £35 million. In 2022, Morningstar announced that it will acquire the
S&P Global S&P Global Inc. (prior to April 2016 McGraw Hill Financial, Inc., and prior to 2013 The McGraw–Hill Companies, Inc.) is an American publicly traded corporation headquartered in Manhattan, New York City. Its primary areas of business are financ ...
-owned Leveraged Commentary & Data (LCD), a company specializing in leveraged loan market data, for $600 million up to $650 million.


Products and services

Morningstar offers a wide array of products and services to both retail and institutional investors.


Morningstar Investment Management

Through its
investment management Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be instit ...
subsidiary, Morningstar currently has over US$265 billion in assets under advisement and management.


Morningstar Direct

Morningstar Direct is a software platform that provides data and analytics to help professional investment managers craft new products and portfolios.


Morningstar Office Cloud

Morningstar offers a single end-to-end cloud-based platform for investment advisors, known as Morningstar Office Cloud. The software allows financial advisors to manage their practice, gain access to data and research, analyze investments, and connect with investors.


Morningstar Premium

The firm offers retail and individual investors with access to news, research, and stock, bond, and mutual fund analysis through its 'Morningstar Premium' subscription product.


Credit Ratings (NRSRO)

In 2010, Morningstar acquired Realpoint, LLC, a former division of private-equity giant Capmark Finance and a nationally recognized statistical rating organization (
NRSRO A nationally recognized statistical rating organization (NRSRO) is a credit rating agency (CRA) approved by the U.S. Securities and Exchange Commission (SEC) to provide information that financial firms must rely on for certain regulatory purpo ...
). The firm was rebranded as ''Morningstar Credit Ratings'' and competes with S&P,
Moody's Investors Service Moody's Investors Service, often referred to as Moody's, is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its historical name. Moody's Investors Service provides internationa ...
,
Fitch Ratings Fitch Ratings Inc. is an American credit rating agency and is one of the " Big Three credit rating agencies", the other two being Moody's and Standard & Poor's. It is one of the three nationally recognized statistical rating organizations (NRS ...
and similar Wall Street firms to provide research and ratings of structured debt products, including
mortgage-backed securities A mortgage-backed security (MBS) is a type of asset-backed security (an 'instrument') which is secured by a mortgage or collection of mortgages. The mortgages are aggregated and sold to a group of individuals (a government agency or investment ba ...
and
asset-backed securities An asset-backed security (ABS) is a security whose income payments, and hence value, are derived from and collateralized (or "backed") by a specified pool of underlying assets. The pool of assets is typically a group of small and illiquid asse ...
. Today, Morningstar Credit Ratings issues credit ratings on both structured financial products (
CMBS Commercial mortgage-backed securities (CMBS) are a type of mortgage-backed security backed by commercial and multifamily mortgages rather than residential real estate. CMBS tend to be more complex and volatile than residential mortgage-backed ...
,
RMBS RMBS may refer to: * Residential mortgage-backed security * Royal Marines Band Service * Rambus Rambus Incorporated, founded in 1990, is an American technology company that designs, develops and licenses chip interface technologies and archi ...
,
CLOs Clos may refer to: People * Clos (surname) Other uses * CLOS, Command line-of-sight, a method of guiding a missile to its intended target * Clos network, a kind of multistage switching network * Clos (vineyard), a walled vineyard; used in Fran ...
) and corporate/financial institutions. On May 29, 2019, Morningstar publicly announced its intention to significantly expand the breadth and scope of its ratings business through a $669 million acquisition of
DBRS DBRS Morningstar is a global credit rating agency (CRA) founded in 1976 (originally known as Dominion Bond Rating Service in Toronto). DBRS was acquired by the global financial services firm Morningstar, Inc. in 2019 for approximately $700 milli ...
.


Morningstar Research Portal

In 2022, Morningstar launched its newest research platform aimed at helping financial advisors utilize Morningstar's investment research and other tools to identify and select investments, monitor investment performance, and inform how they communicate with clients.


Influence and criticisms

Morningstar is considered powerful in the investment management industry, and the firm's ratings and recommendations often influence a fund's assets under management. The firm's "star" ratings are often used by fund managers in marketing materials, and positive star ratings bring a credibility to a fund's strategy. Morningstar's analysts and data are frequently quoted in outlets such as the ''
New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...
'', ''
Wall Street Journal ''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
'', and ''
Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...
''. In October 2017, the ''Wall Street Journal'' published a front-page feature story criticizing Morningstar's influence and questioned the predictive power of the firm's rating system. In response, Morningstar provided a quantitative analysis showing that higher-rated funds outperform lower-rated funds, but cautioned against using the ratings as a definitive marker of future performance.


Corporate identity

Morningstar's current logo was designed by the famed graphic designer
Paul Rand Paul Rand (born Peretz Rosenbaum; August 15, 1914 – November 26, 1996) was an American art director and graphic designer, best known for his corporate Logotype, logo designs, including the logos for IBM, United Parcel Service, UPS, Enron, Morn ...
. The design features the "o" in Morningstar appearing as a rising sun, which is a nod to a
Henry David Thoreau Henry David Thoreau (July 12, 1817May 6, 1862) was an American naturalist, essayist, poet, and philosopher. A leading transcendentalist, he is best known for his book ''Walden'', a reflection upon simple living in natural surroundings, and h ...
quote that inspired the company's name. Mansueto considers the logo "one of our most valuable assets".


Major offices

The firm is headquartered in
Chicago, Illinois (''City in a Garden''); I Will , image_map = , map_caption = Interactive Map of Chicago , coordinates = , coordinates_footnotes = , subdivision_type = Country , subdivision_name ...
, with major regional offices in
New York City New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...
,
London London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...
,
Paris Paris () is the capital and most populous city of France, with an estimated population of 2,165,423 residents in 2019 in an area of more than 105 km² (41 sq mi), making it the 30th most densely populated city in the world in 2020. Si ...
,
Sydney Sydney ( ) is the capital city of the state of New South Wales, and the most populous city in both Australia and Oceania. Located on Australia's east coast, the metropolis surrounds Sydney Harbour and extends about towards the Blue Mounta ...
,
Hong Kong Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China (abbr. Hong Kong SAR or HKSAR), is a List of cities in China, city and Special administrative regions of China, special ...
,
Shenzhen Shenzhen (; ; ; ), also historically known as Sham Chun, is a major sub-provincial city and one of the special economic zones of China. The city is located on the east bank of the Pearl River estuary on the central coast of southern provi ...
and other cities around the world.


See also

* American Association of Individual Investors *
Bloomberg L.P. Bloomberg L.P. is a privately held financial, software, data, and media company headquartered in Midtown Manhattan, New York City. It was co-founded by Michael Bloomberg in 1981, with Thomas Secunda, Duncan MacMillan, Charles Zegar, and a 1 ...
*
Nationally recognized statistical rating organization A nationally recognized statistical rating organization (NRSRO) is a credit rating agency (CRA) approved by the U.S. Securities and Exchange Commission (SEC) to provide information that financial firms must rely on for certain regulatory purp ...
*
Reuters Reuters ( ) is a news agency owned by Thomson Reuters Corporation. It employs around 2,500 journalists and 600 photojournalists in about 200 locations worldwide. Reuters is one of the largest news agencies in the world. The agency was est ...
*
Value Line Value Line, Inc. is an independent investment research and financial publishing firm based in New York City, New York, United States, founded in 1931 by Arnold Bernhard. Value Line is best known for publishing ''The Value Line Investment Survey ...


References


External links

*
Investor RelationsUnderstanding the Star Rating and Fund Analyst Picks (from www.morningstar.com)
{{Authority control 1984 establishments in Illinois 2005 initial public offerings American companies established in 1984 Companies based in Chicago Companies listed on the Nasdaq Credit rating agencies Financial data vendors Financial services companies established in 1984 Research and analysis firms Research and analysis firms of the United States