Extel Plans New MiFID II Service


Extel, which provides the most prestigious survey of European buy-side research preferences, will be launching a new service inspired by pending MiFID II reforms to research payments, according to informed sources.

The new service will be based on the current survey process while inviting engagement throughout the year.  The firm plans to run polling outside the traditional March/April annual survey offering more regular and bespoke perception services.  In addition it will be meeting more regularly with each of its three constituencies – buy-side, sell-side and corporates.

At the same time, Extel will utilize more granular information from its survey, creating more detailed information services.  The Extel survey has detail by industry sector, by country and by service (conferences, non-deal roadshows, industry experts, reverse road shows, economics & strategy, UK small/midcap research, equity sales, derivatives, equity trading).

Extel hired a new manager last year, David Enticknap, who has prompted the changes to Extel’s offerings. Enticknap’s background was largely in sell-side equity product management and client strategy for UBS, CLSA and MainFirst Bank and he brought an appreciation for the value of the Extel survey data for equity product management and brand building.

Extel plans a more consultative approach drawing on its data, expertise, and new analytics to generate insights into business structures for the sell-side. This, combined with the additional surveys, represents the core of the new service.

Buy-Side Offerings

Extel is encouraging the buy-side to use its survey results as a point of reference to benchmark internal evaluations of research providers and their services. As MiFID II requires more robust valuation of research providers, the new service is envisioned as an audit tool and vendor check, providing the buy-side with insights on substantive providers and an ability to investigate any disconnects in their procurement process.

Extel also allows buy-side firms to download customized data to drill into specific sectors or countries, if they are seeking specialists firms to supplement current research providers.  In addition, the data allows peer comparisons of research evaluation.

Sell-Side Offerings

The sell-side will most likely be the biggest beneficiary of Extel’s new service, which can be used for benchmarking and competitive analysis.  Banks can drill into detailed analysis of specific equity product offerings and/or geographies to assess relative standing versus competing services.

Extel offers Broker Scorecards which summarize buy-side feedback across multiple dimensions including aggregate scores and by sector and region.  The scorecards allow customization and data to be exported.

Investor Relations Offerings

With Extel’s acquisition by WeConvene in 2014, the corporate side of the equation has gained increasing importance and its survey now provides buy-side and sell-side feedback on 1,100 publicly traded companies.  The primary use case is for benchmarking IR performance relative to peers on elements such as roadshow planning, budget setting, team sizes and use of executive time.

The Extel Survey began in 1974 with 53 asset management firms.  The current study includes over 16,000 participants from 93 countries casting nearly 445,000 individual votes. It maintains data on approximately 270 research providers and 3,200 investment managers.  Parent WeConvene raised $12.5 million in a Series B funding round earlier this year.

Our Take

MiFID II’s unbundling provisions are both a challenge and opportunity for Extel.  Interactions data collected by the sell-side, buy-side and third-party platforms promises to become more real-time indicators of value.  Nevertheless, the breadth and depth of the Extel survey’s coverage of European markets is formidable and will continue to be a key benchmark for research value, particularly as Extel ups the frequency of its surveys and provides more granular feedback to participants.


About Author

Sandy Bragg is a principal at Integrity Research Associates. He has over thirty years experience as an investment research professional. Prior to joining Integrity in 2006, he was an Executive Managing Director at Standard & Poors, managing S&P’s equity research business and fund information properties. Sandy has an MBA from New York University and BA from Williams College. Email: Sanford.Bragg@integrity-research.com

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