UPDATE: Pearson Beefs Up FT Offering With MGA Buy

U.K. publisher Pearson PLC (PSON.LN) Wednesday said it had bought Medley Global Advisors LLC, an advisor to investment banks, hedge funds and asset managers, as it tries to make its Financial Times unit less reliant on depressed advertising markets and bolsters the services it can offer finincial services professionals.

U.S.-based MGA provides research and analysis on economic policies that drive interest rates and currencies and on energy markets. It distributes the research through tailored daily emails to clients, Pearson said.

The company said MGA would be added to the FT's portfolio of services geared towards financial institutions and asset managers. It already publishes a fund management supplement FTfm as well as Money-Media, an online news service for fund managers.

It didn't disclose financial details for the deal, but said MGA had gross assets of $7.3 million at the end of 2009.

Like rivals in the newspaper industry, the FT has been hard hit by the advertising downturn that followed the credit crunch. The paper's core subscriber base is in the financial services industry and advertisers pulled back as the downturn hit the sector and advertising spending.

However, last month Pearson said the FT ended 2009 better-than-expected, with subscription revenue remaining resilient and the downturn in advertising showing some signs of easing.

"This acquisition delivers another premium service to an important FT audience and reinforces our strategy of building strong subscriber and digital businesses in core sectors," said John Ridding, chief executive of Pearson's Financial Times.

MGA is based in New York with 45 advisors in offices in New York, Washington DC, London, Frankfurt, Beijing and Tokyo. It was founded in 1997 by Richard Medley, a former chief political strategist for George Soros, but he left the company in 2005 when it was bought by private equity firms Boston Ventures and Castanea Partners. Goldman Sachs also had a minority stake.

A Pearson spokesman said there is scope to expand MGA internationally, given the FT's presence in Europe in Asia, while MGA's strength in the U.S. will reinforce the FT's growth prospects there.

"We see strengths across its portfolio of businesses, which complement existing FT efforts and strategy, and substantial scope for international growth," said Ridding.

The FT also plans to use MGA's brands in its events and conferencing business, the Pearson spokesman said. MGA products could also eventually be distributed through FT services like FT.com, although no decision has been taken, he added.

In addition to bolt-on acquisitions in the financial services area such as MGA, Pearson is focused on growing its vast international education operations, particularly in emerging markets.

Meanwhile, Pearson said last month it is reviewing "strategic alternatives" for New-York listed Interactive Data Corp (IDC), in which it has a 61% stake.

At 1128 GMT, Pearson shares traded down 0.7%, or 6p, at 888p, while the FTSE 100 was up 0.26%.

-By Michael Carolan, Dow Jones Newswires; 44-20-7842-9278; michael.carolan@dowjones.com

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