A new research productivity platform is hoping to benefit from pending regulatory changes in Europe. Feedstock is a London-based application which filters and prioritizes emails received by asset managers from the sell-side.
The system uses machine learning to understand what topics are of interest to an analyst or PM and prioritize emails accordingly. “Users on the buy side receive vast quantities of emails every day but at best only 10% are of interest,” said co-founder Charlie Henderson. “Our platform incorporates behavioral algorithms and machine learning to extract the relevant information and prioritizes it for our users.”
Feedstock is primarily positioned as a productivity tool, but it also provides an audit trail for MiFID II compliance. Besides emails, the system captures calls, meetings, conferences and external sources. Usage metrics can be shared with the sell side if users wish.
How is Feedstock different from Research Management Systems like Code Red or Tamale? “Our platform is personalized to each user, adapting to their specific interests, unlike a rigid filing system,” said co-founder Lucas Wurfbain. “The FeedStock system meets the fund manager’s ever changing needs through user defined information channels. For example, earnings season one week, China GDP numbers the next.”
Wurfbain has an extensive buy side pedigree, having worked as a portfolio manager at Fortress Investment Group, at Rubicon Fund Management and at Insparo Asset Management and an analyst at GAM. Henderson brings sell side experience as an analyst and salesperson.
The founders seem unconcerned by the sell side’s increasing restrictions on research dissemination. Banks are moving away from the old push model of PDFs. Instead, research reports are increasingly embedded into web pages so that banks can more easily restrict access and track readership.
However, banks are still pushing the links to their research reports (which remain marketing chum for higher value services like analyst access.) Since Feedstock users have access to the reports, Feedstock says that it will be able to capture the relevant metrics.
The Feedstock system is not live yet. The plan is to start demoing the system next month and for a beta release in March.
At this point, the company is self-funded, with the intent of a capital raise later in the year.
Our Take
The founders of Feedstock initially considered launching a research marketplace like Airex or RSRCHXchange, but decided to focus on a productivity/audit tool instead. In this respect, Feedstock is similar to Seed Alpha, which is also designed to provide an audit trail for consumption metrics.
Although Feedstock is positioned to be more flexible and personalized that the RMS systems, it has much in common with Code Red or Tamale. However, to the extent Feedstock is less intrusive, it will be easier to implement.
Feedstock is late to the party, but up until very recently the regulatory picture hasn’t been clear. Asset managers are still gearing up for the new rules which will likely be delayed until 2018 for implementation, so there is still an opportunity for new approaches like Feedstock.