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anything that would be an obvious breach. ‘I’ve never got, “Hey buddy, what are earnings really going to be this quarter?” Sometimes it’s a little too specifi c, but when it is crossing the line into non-public information I give a really simple answer like “I don’t think that’s something I can share with you”, or perhaps “I can give you a range but I don’t think I should tell you the exact number”. And zero times have I had anyone push. The guys asking the questions are the ones who face the consequences, not me, so I have zero concern that I’m ever going to say anything that’s going to get me in trouble. ‘If they are on the hedge fund side, I think their worry is not going to jail, but that if they get improper information they will be prohibited from putting capital into whatever idea they had, or they might get into trouble with their manager and have to do remedial compliance training.’ Harad admits that he enjoys his expert


conversations. It is fun to be treated like an authority and occasionally to infl uence important investment decisions, he says. Best of all, there is no preparation required, no follow-up work when he puts down the phone, and the money will soon appear in his bank account. A regular ‘expert’ from the pharmaceutical


industry who asked not to be named said it was a guilty pleasure to sit at work on his employer’s time and earn several hundred dollars by setting people straight about his previous employers, occasionally even settling an old grudge by revealing that a


talking about hundreds of billions of dollars being spent on decision- making


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management team had misrepresented its true performance.


T


he networks aim to source the right expertise for their clients by identifying a stable of experts, often by using


LinkedIn profiles and then vetting them. They list each person’s expertise and ask them to set their standard price for a phone call. When an appropriate request comes in, a number of experts are sounded out about their knowledge of the subject, then the network chooses which names to offer the client. The normal business model is to ask clients to pay an annual subscription. Many fi rms sign up to several networks, so it is not unusual for experts to be approached by more than one network about the same job. GLG is far and away the biggest source of work for experts, but it has a reputation for driving a hard bargain: it pays by the minute, so it will reduce the fee it pays to experts if the call does not run to 60 minutes, even though clients are charged for a full hour. Staff are said to be rewarded for limiting the amount of money they hand over to experts. Harad has learned to cut the $500 fee he charges through other networks to $300 when dealing with GLG, otherwise its staff are unlikely to put him forward to clients. The suspicion among many experts is that GLG staff are incentivised to place profi t for the business above some other concerns. Indeed, not everyone is complimentary about the services provided by expert networks. Auren Hoffman, chief executive of US-based geographical data provider SafeGraph and an investor in more than


120 tech fi rms, says venture capital fi rms should think twice before relying on GLG experts to assess potential investment targets because supposed experts could have exaggerated their credentials in the hope of making quick cash from a phone call. Hoffman told an online discussion group


that after SafeGraph had completed a fundraising round in February 2021 a prominent venture capital (VC) fi rm shared with him the four calls it had completed with GLG-provided ‘customers’ of his fi rm. ‘Two happened to be our two smallest customers and two were random guys who were tangentially related to our market but defi nitely not customers,’ Hoffman said. ‘This was a waste of time for the VC and gave them a false impression of SafeGraph.’ But there are plenty of satisfi ed customers; 22 of GLG’s 25 biggest clients have kept up their subscriptions for more than a decade. A Mayfair-based private equity manager who did not want to be named tells Spear’s: ‘We are very happy with the bang we get for the buck in the calibre of people we talk to through GLG. When you consider that one decision we make can involve hundreds of millions of dollars, this is a very worthwhile expense even if just one [interviewed expert] turns out to have really valuable information.’ Having grown on the back of hedge fund clients and then management consultants who repackage the experts’ insights to sell to their own clients at massive mark-ups, the networks are now seeing surging demand from private equity funds fl ush with cash and forced to search for new deals more widely, deeply and creatively than ever before. The key to unlock future growth may be


the networks’ ability to win over the corporate sector by persuading ordinary businesses that they can win fast access to outside expertise to help guide their normal decision- making processes without having to take on new permanent employees or expensive consultants. Max Friberg of Inex One estimates that corporates make up only 10 per cent of current demand for expert networks but offer the greatest untapped market of all. ‘When you look at the sheer size of the corporate world you are talking about hundreds of billions of dollars being spent on decision-making,’ he says. ‘The opportunity there is virtually unlimited.’


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