BARRA Inc., Berkeley, Calif., expects to enter a bid to buy Balch Hardy Scheinman & Winston Inc.'s performance analysis software, known as Style Advisor, and the program's institutional client base, both now tied up in bankruptcy proceedings.
"We're interested in the business," said Christopher Luck, director-sponsor services. "It is a viable product with a viable client base. We have an attorney looking at what's going on."
Balch Hardy filed for bankruptcy in January and plans to liquidate the firm as a result of losing a $4.4 million lawsuit to Richard J. Brignoli and Brignoli Models Inc., New York, in a licensing-payment dispute over the use of an options overwriting model.
R. Steven Hardy, Balch Hardy principal, said he also plans to bid for the Style Advisor and start his own firm to market the product. But he said his plans are indefinite and he hasn't started a firm yet.
Apart from the potential Balch Hardy software acquisition, BARRA this month started marketing a Windows-based investment style analysis software package designed with a similar methodology as Style Advisor.
In addition, Ibbotson Associates Inc., Chicago, plans to bring to the market soon similar Windows-based style analysis software. But Ibbotson isn't interested in bidding on Balch Hardy's software, said Paul D. Kaplan, vice president and chief economist and the key person who is developing the Ibbotson analysis program.
Other firms may bid for the Balch Hardy analyzer, although representatives of them couldn't be reached for confirmation.
Attorneys at Tenzer Greenblatt Fallon & Kaplan, the New York law firm handling the Balch Hardy bankruptcy, couldn't be reached for comment on the status of the software's disposition.
Kenneth J. Winston, who created the Style Advisor software for Balch Hardy and joined the Chicago-based consulting firm of Richards & Tierney Inc. as a managing partner, said he isn't interested in bidding for the software.
Like the Balch Hardy software, both the BARRA software - called the Global Style Analyzer - and the forthcoming Ibbotson software - called EnCORR/Attribution - evaluate the style, performance and value-added contribution of both external money managers and internal investment portfolios.
All three software programs are based on the research and analysis methodology developed by William F. Sharpe, Nobel laureate in economics and professor Stanford University, Palo Alto, Calif.
Using the Sharpe method, known as "return-based analysis," the software analyzes the performance, risk level and style of money managers or any equity portfolio using only their investment returns as input.
All three vendors designed their software for use by pension sponsors.
The programs enable pension executives to do sophisticated analysis and evaluations in-house, tasks sponsors normally would hire consultants to perform. Because of the ease of data input and manipulation of figures, even small pension staffs can handle the software.
