The Real Deal Miami

Upstart ratings agency looks to fill gap where Moody’s, S&P fell short

May 17, 2010 11:46AM

At age 68, longtime private detective Jules Kroll is breaking into the credit-rating business with an eye toward besting his besieged competitors with old-fashioned investigative techniques. While Moody’s Investor Service and Standard & Poor’s have seen their reputations tarnished by the inflated junk mortgage ratings that contributed to the housing bust — last week, news broke that Attorney General Andrew Cuomo was investigating the relationships between ratings agencies and eight big Wall Street banks — Kroll’s upstart agency plans to capitalize on their fall from power. Kroll Bond Ratings, set to launch in July, plans to knock on doors to see if people are still living in their homes, rather than rely on financial models or reports from loan servicers. But that’s not to say he’ll succeed: despite their recent failings, the major ratings agencies haven’t seen a decline in their market share. Moody’s and Standard & Poor’s control a combined 75 percent of the market; Fitch comes in third with 20 percent. Still, Kroll said he’s hiring a staff of 25 including number-crunchers, auditors and investigators and expects to generate up to $400 million in annual revenue by 2015. [Crain’s]