The AICM is thrilled to welcome Bureau van Dijk, the specialist in global private company information as a National Partner and looks forward to working closely with their team to provide leading edge reporting solutions for credit managers. To introduce our new relationship, Bureau van Dijk's country head Stephen McKinney has prepared a summary of how they provide vital information for credit managers in a format that assists with the risk decision and supports the credit manager's recommendation.
Untangling the world of private company information Trust is a constant and fairly consistent challenge when professionals look to obtain private company information. When you look to obtain financial information on a company you naturally ask “where is this information coming from and what are the underlying sources?”
Some of the uncertainty around private company information can be lifted by exploring exactly what constitutes a private company, and why exactly it’s important for a business to know about the financials and other risk indicators related to these companies. According to Forbes magazine the workforce of the USA’s largest 441 private companies in 2008 was over 6 million-strong, contributing nearly $2 trillion in revenue to the country’s economy. That’s over $5,000 for every man, woman and child in America. This figure is just from the limited group of top-performing companies that made it on to the Forbes “America’s Largest Private Companies” list that year.
If all private companies were included, the figure would be higher. This tells us something about just how important private companies are to form the bigger picture, and how important it is not to ignore their contribution. Even public companies contain private subsidiaries inside their corporate structures, which is something of high importance in these times of heightened sanctions and scrutiny, and transpacific compliance.
If we look to understand a little more about the reporting differences around the globe we can see why there is such great diversity between how different regions collect data.
Here are some examples:
- Some regions like the UK grew a philosophy, born in the industrial revolution, that investors would be drawn to companies whose profit and growth potential were evident in their accounts – and this practice officially exists today, controlled by Companies House.
- But in the USA it’s a different story – with no single governing body responsible for collecting this data.
- In Asia-Pacific company information gets even more complicated due to cultural diversities and volume alone (China’s company count runs into eight figures).
Bureau van Dijk understands that we cannot ignore the thousands of smaller repositories of information available to us and that’s why we work with so many information providers (IPs) across the globe. Understanding how these information providers monitor and harvest information is seemingly mind-boggling – for example, Cortera in the US, glean information from the thousands of county administrations around the nation. These smaller governing bodies receive vast numbers of varying submissions from millions of private companies and, using clever algorithms and analysis, an IP such as Cortera can produce valuable insights.
BvD then overlays a ‘non-financial’ risk score from MODE Finance, to give a risk profile on small private companies which puts you in a much stronger position to make evidence based decisions. To understand more about who reports what and why, and how you can use it you can read our white paper – Untangling the World of Private Company Information.
By Stephen McKinney, General Manager – Oceania T: 61 2 9233 3088 E: email@example.com www.bvdinfo.com