Third Bridge report shows significant inconsistencies in the pricing of investor research

Europe Uncategorized

Third Bridge, a leading international primary research firm, surveyed and interviewed 30 respondents from buy-side asset management firms, to gather information on how investment banks and boutique sell-side firms are pricing their research.

The survey highlights the inherent problems with how investor research is priced, a topic that is being hotly discussed ahead of the introduction of the MiFID II rules, which are due to come into effect in January 2018.

Testimonies direct from asset managers reflect the confusion around the true cost of research in the current system, which is fuelled by inconsistencies in the way that research is priced. The report’s findings indicate that larger funds are paying upwards of $2m per annum for bundled coverage, while smaller funds are being quoted less than $50k for the same product, and research provided by US investment banks has a range of pricing that often reaches unrealistic levels.

Link here to view the full report.

“The beauty of MiFID II is that it will create transparency around the cost of research, meaning that investors can choose what they decide to pay for. Our survey shows how wide the range in pricing options offered by traditional sell-side banks is right now. For many banks, subscription pricing is uncharted territory and they will have to quickly catch up with the independent research market,” said Joshua Maxey, Managing Director at Third Bridge.

Third Bridge provides private equity firms, hedge funds and strategy consultants with the information they need to understand the value of their investment opportunities. The core offering includes expert consultations, interview transcripts and market intelligence reports that provide unique human insights into companies and markets. With headquarters in London, and offices in New York, Shanghai, Beijing, Hong Kong and Mumbai, the company’s global footprint is far reaching and continually expanding.

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