The European Association of Independent Research Providers (Euro IRP) has established a searchable directory for independent research providers to help investment firms locate a wide array of independent research providers while also helping research firms reach a potentially wider audience for their services.
The directory allows investors to search for providers based on sector or geographic coverage, asset class, type of research and business model, among other factors. The current directory is made up of 56 research providers that are currently members of Euro IRP, but the association hopes to expand this to more than 500 providers globally.
‘’This is an important first step for the whole independent sector,’’ says Peter Allen, chairman of Euro IRP. ‘’To date, there has never been a venue that allows investors to search for independent providers, whilst for the IRPs – many of whom have small operations that are producing high-quality research – it provides a useful way for them to reach a wider audience.’’
Currently listing in the directory is restricted to full members, but Substantive Research understands a separate category of IRPs who will just wish to list on the directory is under consideration, although they will still need to meet Euro IRP’s requirements as far as independence is concerned, as posted on their web site here.
The initiative is also important in the wider context of the new regulations for the investment research market, set to be implemented in 2017 under MIFID 2. The proposed regulations will require fund managers to set annual budgets for investment research spending, which will also probably need to be funded from their own account rather than passing the cost on to their clients. This is likely to lead to a more cost-conscious approach from investment firms on research spending, which could place IRPs at a competitive advantage because they operate on a lower cost base than typical bank research departments.
“As investment managers increasingly focus on the value of their research spend, this initiative will provide a valuable resource for identifying and sourcing the best possible independent analysis for their clients,’’ says Allen.