Have you seen the coming of the “new” experts?
With the increased scrutiny on the cost of analyst access, the on-boarding of “new” experts in the form of independent research providers, consultants and subject matter experts is only set to increase. Integrity Research Associates projects spending on primary research will actually rise 6.5% in 2019 as asset managers value highly differentiated inputs to their research process including expert networks, channel checks, and formal survey research.
The growth in expert networks is also a reflection on the shrinking in the number of public companies. According to Bloomberg about 3,600 firms were listed on the U.S. stock exchanges at the end of 2017, down more than half from 1997. This corresponds to a growth in private equity and alternative asset classes, where expert networks offer access to industry experts providing insight into investment targets which would not typically be serviced by sell-side equity analysts.
Recognising these regulatory and market headwinds, we are seeing many of the traditional corporate access teams in banks, if not fold into the research function, position themselves as newly formed “expert” access teams - opening the doors to a bigger pool of experts that extend beyond the traditional equity analyst. The same challenges of managing these relationships, including call scheduling, the time spent and sharing the knowledge that exists across the organisation has become important for both buy and sell-side.
Tracking of time spent in meetings and calls with analysts, providing transparency to costs has become more important than ever. Initially, buy-side firms either relied on the sell-side to provide them with this data or manually tracked each and every interaction themselves. Neither of these were particularly desirable when taking into account the operational cost of supporting this as well as the inherent inaccuracy.
Many new technology solutions have sprung up to track interactions and service the changing corporate access landscape between buy-side, sell-side and issuer – few have sought to tackle real workflow issues or touch expert access. Firms are slowly realising they need to control their own data and workflows to manage their own destiny.
Author: AMAR RAJANI
Amar Rajani is Founder and Managing Director at Argella, a FinTech advisory firm with specialist knowledge in research, data and collaboration. Prior to this, Amar spent 17 years at Bloomberg LP, where he was Global Product Manager for Bloomberg’s research management business.
Amar acts as an advisor to Coleman Exchange, a software solution developed by Coleman Research, which helps buy and sell-side firms to automate and better manage many of the administrative and compliance tasks associated with Expert research interactions.