Calling All Fundamental Research Shops!


According to a number of indy research firms, the team at Jaywalk is having a tough time locating all the “fundamental research” required by the five investment banks interested in using the firm’s “Meritocracy” system.

Sources indicate that Jaywalk has identified between 1000 to 1500 stocks required by at least 1 of the 5 independent research consultants where NO FUNDAMENTAL RESEARCH COVERAGE has yet been provided by any of the 100 research firms under the Jaywalk banner (though these stocks might be covered by Quant research shops).

Indy firms have also noted that Jaywalk is missing fundamental research coverage on 400 to 500 stocks that ALL 5 CONSULTANTS REQUIRE to meet the demands of the global research settlement.

WOW!  Maybe we should start a fundamental research firm!  Of course, one might ask what is so magical about fundamental research.

Comment by knowledge:

It is somewhat interesting since there are shops that exist and provide research on 8500 companies and provide independent research.
Go figure.

Comment by Paul:

I believe part of the solution is that the IC’s will seek other forms of research, such as quantitative, to fill in the gaps of any missing coverage. The shortfall mentioned I believe only relates to funamental, individually written research reports. There is plenty of research out there if they include others, such as quant firms.

Comment by frankkappa:

Lesson # one: When an independent consultant select the research first. That is what you were hired to do. Then get an aggregator to wrap things up or a couple of quant shops to fill in the gaps.

Don’t worry about centralizing the contractual process. You are getting paid $500/hour. Also all the firms want to do business with you. You can send them all a standard contract and they will sign it.

On another note why don’t Lehman and UBS give their independent consultants another couple of million a year so their ICs can go out there, hire some good fundamental shops and actually meet the deadlines? Is a couple of million by Lehman too much to spend so ensure their retail clients are actually getting a robust package they can use instead of someone’s last minute science experiment?

I hear the other ICs are almost done. Should be interesting.

Comment by Josh:

Well, it’s possible the firms intend to add additional research providers or perhaps Jaywalk has said it will remedy the situation in time to roll out coverage. Gives me something to look into today….


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