Gerson Lehrman Group
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|Headquarters||New York, United States|
|Key people||Mark Gerson (Co-Founder and Chairman); Alexander Saint-Amand, (CEO); Thomas D. Lehrman (Co-Founder and Director)|
|Services||Professional Learning; Knowledge Brokerage; Expert network|
|Slogan(s)||GLG Is Transforming The Way The World's Top Professionals Share Expertise And Learn|
Gerson Lehrman Group (GLG) is an expert network that operates a membership-based platform that provides independent ad-hoc consulting services to institutional investors around the world. It was founded in 1998, backed by private equity firms Silver Lake Partners and Bessemer Venture Partners, and is headquartered in New York City with regional hubs across Europe, the Americas, Asia and the Middle East.
GLG clients also include professional services firms, corporations, and non-profit organizations. GLG experts include consultants, physicians, scientists, engineers, lawyers, senior current and former c-level executives, and former government members.
Gerson Lehrman Group was founded by Duke University and Yale Law School graduate Thomas Lehrman and fellow Yale Law School graduate Mark Gerson, who had worked at the hedge fund Tiger Management, that led to a generation of spinoffs (known as Tiger Cubs). GLG, initially funded by a friends and family round, was formed as a publishing house to produce industry guidebooks for institutional investors, a business they abandoned a year later when they could find no buyers for their product. The two retooled their business model a year later to offer a matchmaking service (later called expert network) to connect investors with independent consultants.
GLG divides its experts by field of expertise, focusing on specific industries or disciplines. GLG practice areas include: Accounting and Financial Analysis; Consumer Goods and Services; Energy and Industrials; Financial and Business Services; Healthcare; Legal, Economic and Regulatory Affairs; Real Estate; and Technology, Media and Telecommunications.
GLG operates a so-called technology-enabled platform for institutions to consult and collaborate with experts in various industries and disciplines around the globe. Clients work with Research Managers who, with the help of a proprietary set of online profiling and compliance tools, identify, find, vet, and connect relevant experts with users. Clients can also identify appropriate experts from the network and manage the logistics around the consulting session via a Web-based software tool called the Research Management Platform (RMP). GLG connects clients with relevant experts in a variety of consulting methods, such as:
- telephone consultations
- educational events
- written reports
- expert surveys
- live meetings, including seminars, round tables, master classes and private visits
- research trips and summits
Experts are usually invited by GLG researchers to join the network based on their expertise or association with industry organizations. Experts can also submit their profiles online, including biographical descriptions and other background information and choose their own honorariums. GLG home page states that it has more than 250,000 experts in its network. A competitor, Vista Research, is said to have a network of 90,000.
According to GLG website the company serves asset managers, private equity, investment banks, and venture capital clients as well as consultancies, corporations, law firms, life sciences companies, marketing agencies, nonprofit and public sectors. Some of its best clients include 15 of the leading 20 global investment banks, 9 of the world's leading 10 private equity firms and Fortune 500 clients in virtually all sectors. According to a report from Integrity Research, over 2/3 of all institutional investors use expert networks to obtain market and company background pertaining to the various investment theses they are researching"  Goldman Sachs and Och-Ziff Capital Management Group were mentioned to be some of GLG's clients. The Economist recently reported that GLG’s clients spend on average $170,000 a year and that GLG keeps a record of "who talks to whom, about what, down to the minute". Gerson Lehrman Group claims it facilitates more than 18,000 transactions a month on average. A typical phone consultation with an expert lasts for approximately 60 minutes. with the experts, who aren't GLG employees.
Although GLG describes the size of it's network at approximately 350,000, only a small percentage of experts in the network are actually engaged on a regular basis by its client base.
In 2006, GLG worked with U.S. Department of Housing and Urban Development to provide new primary data and analysis relevant for any other recovery plans in the rebuilding of Louisiana following Hurricane Katrina and Hurricane Rita. It has been on the news that it has also done some other philanthropy work with smaller charities.
All GLG "Council Members" are required to complete an interactive tutorial and agree to its Terms and Conditions on an annual basis.
As internal policy, experts without the written consent from their employers may also only speak with the same client no more than three times in one year, and the expert cannot earn more than $2,500 in a year from a single client.
In 2011, GLG created failed service "G+", a professional question-and-answer website, edited and organized by its community of users to compete with Quora and to attract more experts to their platform. GLG rebranded G+ as "Hightable" in 2012. Hightable was discontinued in March 2014.
As the use of alternative research providers within the financial industry has grown, brokerages themselves have been partnering with firms such as GLG.
On September 10, 2008, the company announced a deal with Credit Suisse, whereby analysts from the financial services giant would be able to tap into GLG’s Council Members as part of their research process. About 300 Credit Suisse analysts became members of the GLG expert network. In 2009 it has also announced a partnership with Frost & Sullivan's, making their over 800 market researchers available to consult with GLG clients.
On July 8, 2010, GLG and Bloomberg announced a partnership that enables clients of the Bloomberg Professional platform to access the GLG expert network through the Bloomberg platform. Through the partnership, Bloomberg clients can view the bios of more than 50,000 GLG Members on the Bloomberg Terminal, request consultations with experts, and access news commentary, video, webcasts and teleconferences.
In October 2011, GLG partnered with and acquired a minority stake in Ushi, a leading China-based business social networking provider, and the largest competitor of Linkedin in the region in order to boost GLG's network of more than 25,000 Chinese subject matter experts.
In addition to GLG's headquarters at One Grand Central Place in New York City, it has offices in Austin, Boston, Chicago, Santa Monica, San Francisco, Washington, D.C., Dubai, London, Hong Kong, New Delhi, Mumbai, Beijing, Shanghai, Singapore, Munich, Sydney, Seoul, Tokyo, Zurich, Dublin, and Paris.
Expert Network Industry
Although GLG is still the "800 pound gorilla", according to a 2008 report by Integrity Research there were at least 25 expert network providers (such as ENG - Expert Network Group, Coleman Research, AlphaSights, CognoLink, DeMatteo Monness, ExpertView, Informed Edge and Public Insight LP) with GLG having about 70% of the market. Estimates of the company’s value range from $875 million to $950 million. A 12-month revenue figure of $220 million was included in a company press release in December 2007 that announced that technology investment firm Silver Lake had made an approximately $200 million investment in GLG. An article published in Financial News in January 2009 reported that the company's revenues for 2008 were $284 million.
The expert network business model has drawn scrutiny for concerns relating to adherence to disclosure rules and sharing of insider information within the investment industry. During 2005, for example, doctors who served as paid consultants to investment firms as a result of their role in an expert network generated a “fair share of controversy.” GLG was part of a lawsuit filed by Biovail in March 2006, in which Biovail claimed that its shares had been manipulated. In September 2006, GLG announced the creation of a proprietary system that helped identify and manage conflicts, leveraging its experience as a pioneer in its industry to craft risk-reducing rules for expert engagements
In January 2007, it was reported that the company and Vista Research, then a Standard & Poor affiliate, were part of an inquiry by the New York State Attorney General’s office into the consulting practices of investment firm clients. As of December 2007, the Attorney General had taken no action, and the investigation appeared to be dormant.
In November 2012, Mathew Martoma, a portfolio manager who worked for an affiliate of S.A.C. Capital Advisors, now known as Point72 Asset Management, was accused in criminal and civil complaints of obtaining secret data while there from a former University of Michigan neurology professor who worked on a clinical trial for an Alzheimer's drug. The professor was named as Dr. Sid Gilman, a paid Council Member of GLG.
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