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## 2010 Acquisitions 

## Realpoint 

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Realpoint is expanding to cover residential mortgage-backed securities (RMBS)—a larger market than commercial mortgage- backed securities (CMBS). 

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Our largest deal of the year was the $48 million purchase of Realpoint, a Nationally Recognized Statistical Rating Organization ( NRSRO) that specializes in structured finance. This builds on our recent entry into the corporate credit ratings market. We believe there’s a large need for new voices and competition among credit raters. We continue to invest in this area and think it represents a major opportunity for Morningstar. 

Realpoint rates commercial mortgage-backed securities ( CMBS)—a market that had significant problems during the financial crisis. But Realpoint does its work the right way. Its analysts visit each property contained in a CMBS issue and understand the associated cash flows. It’s solid, bottom-up research. Realpoint earns the bulk of its revenue by selling its research to buy-side institutional clients—proof its research has value. 

Rob Dobilas leads Realpoint and has a deep knowledge of the CMBS industry. Rob started Realpoint as a unit of GMAC Commercial Holding in 2001. In 2007, Rob and Realpoint’s senior team bought the business from GMAC (then called Capmark). One of our senior managers met Rob at an industry event. She was impressed and recommended we talk to Rob. We met with him, were also impressed, and agreed it made sense to acquire Realpoint. We’re providing growth capital to expand Realpoint’s business, and this year we plan to enter the residential mortgage-backed securities market ( RMBS). The RMBS market is larger than the CMBS market and a natural extension of Realpoint’s capabilities. 

