GLG & The Future of Expert Networks

In Practise Weekly Analysis

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In each weekly email, we write a short summary of our learnings from an interview on a particular company that we’ve studied the previous week. We only intend to share our analysis if we feel it’s incremental to what is already known about the business or industry in question.

This week is a little different because GLG, the largest global Expert Network (hereafter EN), filed an S1. We spent the weekend reading the filing and while there are already articles from two great writers here and here, we thought we could share our views on the industry, competitive advantages for EN’s, and our mission at In Practise.

Founded in 1998, GLG, a traditional expert network, is in the business of connecting domain knowledge experts to investors and corporations in 1-hour private phone interviews. Historically, there have been three major users of ENs: strategy consultants, private equity, and hedge funds. Each group uses the service in slightly different ways - this is key to understanding the nature of competitive advantage in this industry.

The way expert networks are used in the private market typically goes something like:

  • Company X is put up for sale
  • Private equity funds simultaneously contact multiple ENs with a project brief to source executives on company X for interviews
  • ENs race to source the most relevant executives to send to the client and schedule interviews
  • The private equity fund, if it takes interest in the deal, commissions strategy consultants to conduct commercial due diligence on company X
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