The 65-year dataset behind a $365 million deal

Earlier this year, Morningstar completed the acquisition of the Center for Research in Security Prices from the University of Chicago for $365 million. If the name is unfamiliar, the thing itself is not: CRSP built one of the earliest comprehensive databases of US stock market returns and its indexes now serve as benchmarks for more than $3 trillion of US equities, including some of the largest and most widely held Vanguard funds.

What Morningstar acquired was more than raw data, it was the indexes and benchmark franchise built on top. But none of that exists without the six decades of data underneath it. The data is the foundation everything else rests on.

The value was built over 65 years

CRSP was not created as a commercial asset. It began more than sixty years ago as an academic effort to measure how US stocks had actually performed over time, work that was genuinely novel then and helped lay the foundations for modern index investing. Nobody set out in the late 1950s to build something a public company would one day pay $365 million for.

The value accumulated gradually, through the unglamorous work of collecting, cleaning, maintaining and extending the data year after year. Each individual year of effort would have looked modest. Compounded across six decades, it produced something no competitor could simply reproduce, because you cannot go back and collect sixty years of history you did not start gathering.

We see this pattern constantly in our own work valuing data assets. The single strongest driver of a dataset's value is rarely its size. It is how long it has been collected, on a consistent basis, for the same subject. Time is the one input a well-funded rival cannot buy back. A competitor can outspend you on almost anything except the years you spent building a record they only started keeping yesterday.

Why it took an acquisition to make the value visible

$365 million of value existed long before the sale. The dataset did not suddenly become valuable the day Morningstar signed. What changed was that a transaction forced the market to put an observed price on something that had, until then, no formal figure attached to it.

For most organisations, data sits on no balance sheet and carries no stated value. It is treated as a by-product of operations, or as infrastructure that simply exists, right up until a moment (an acquisition, a fundraise, a sale) compels someone to ask what it is actually worth.

Institutions of all kinds, universities, hospitals, public bodies, research bodies, sit on some of the most distinctive and hard-to-replicate data in existence, often built over decades of patient work. Very few of them know what those assets are worth or that they are assets at all. When value is eventually realised, it is frequently at a single point in time, on someone else's terms.

The lesson is not "sell your data"

The University of Chicago will have weighed a complex set of considerations and selling is only one of many things an organisation might do with a valuable data asset. Some data is more valuable kept and developed; some is more valuable shared; some should not be commercialised at all.

You cannot make a good decision about an asset you have never valued. Whether to sell, license, invest further or simply recognise it, all of those choices depend on first understanding what you are holding. An organisation that knows what its data is worth is in a position to decide.

CRSP is a vivid example because the figure is large and the history is long. But the underlying situation is surprisingly common. Most organisations are sitting on value that has been accumulating quietly for years, unmeasured and unrecognised, until an outside event forces it into the light.

The better path is to turn the lights on first.