BCA Research Shutters Products & Reinvests to Focus on New Markets

0

Effective August 1, 2018, BCA Research plans to shut down five of its existing research products which management says are underperforming.  However, the firm plans to reinvest the savings from this move into a number of areas in order to help the firm expand into new markets, including wealth management and hedge funds.

BCA Cancels Five Research Products

BCA Research has recently written to clients subscribing to five of its sector-based products that it plans to shutter them at the end of July as they have not performed as expected.  The five products BCA is planning to close next week include:

  • EM Equity Sector Strategy (EMES)
  • Energy Sector Strategy (NRG)
  • Frontier Markets Strategy (FMS)
  • Global Alpha Sector Strategy (GSS)
  • Technology Strategy (TECH)

Due to the closure of these products, a number of employees will be leaving BCA.  Ultimately, this will produce a significant cost savings for the firm.

New Areas of Investment

However, BCA does not plan to pocket the savings resulting from the closure of these five products.  Instead, management of the firm has decided to reinvest these savings in a variety of ways in order to better position the firm to their serve existing core markets, as well as expand into new markets including wealth management and hedge funds.

Bashar AL-Rehany, CEO of BCA Research explains this move, “Regulatory reforms such as MiFID II have shrunk the research market and changed the competitive landscape.  Competing for market share is no longer enough.  We must find new markets and win against new competitors.”

One of the areas the firm plans to invest in is in account management.  The firm has decided to split the global sales leader role by hiring Jonathan Kayne as head of Americas Sales based in New York.  Mr. Kayne formerly held senior sales positions at FTSE Russel, MSCI Barra, Raymond James, and Merrill Lynch.  Angus Hume, previously Global Director of Sales, will be named the head of International Sales based in London.  BCA management feels this move will improve the firm’s focus on account management and client service in both the US and International markets.

Another area the firm plans to invest in is to increase its focus on marketing.  Consequently, BCA hired Chris Ciompi as Chief Marketing Officer to lead marketing, branding and content product development.  In this role, Mr. Ciompi will launch new product development strategy based on a comprehensive analysis of client needs and market segmentation.  Prior to accepting his new role at BCA, Mr. Ciompi was SVP and Head of Marketing for Global X. Previously Ciompi held senior marketing and consulting positions at Liberty Mutual and McKinsey & Company.

A third area BCA is planning to reinvest a significant amount of capital in is in their technology.  AL-Rehany explained this move, “We believe that digital delivery of our content offers faster access to components of our research such as views, trades and investment conclusions.  We will further invest in our digital presence and delivery of our products with a new platform that will better embed us in our clients’ workflow.” In 2014, BCA rolled out their BCA Edge online research platform in an effort to facilitate their clients’ demand for digital content.

Our Take

This week’s planned decision to shutter five BCA Research products is not terribly surprising as we have written in the past about the revenue weakness BCA has experienced during the first six months of fiscal year 2018.

What is particularly interesting is that BCA Research is actually planning to reinvest the cost savings of these product closings in a number of ways geared towards helping the firm grow its business in new markets.

In response to a direct question by Integrity Research about whether these moves were part of a plan by Euromoney to dress BCA up for sale, management strongly denied the firm was considering a sale of BCA.  Instead, management felt this move should be seen as a commitment by Euromony to reposition BCA Research in order to facilitate new revenue growth following the difficult period it has experienced over the past twelve months.

 

Share.

About Author

Mike Mayhew is one of the leading experts on the investment research industry. In addition to founding Integrity Research, Mike is on the board of directors of Investorside Research Association, the non-profit trade association for the independent research industry, and a frequent speaker on research industry trends and developments. Mike has over thirty years of research industry experience. Email: Michael.Mayhew@integrity-research.com

Leave A Reply