New York – Sidoti & Co., a leading small-cap and micro-cap fundamental equity research provider, recently made its first foray into the distribution of equity products to institutional investors. Sidoti served as sub-placement agent for a transaction that closed on October 20. CSCA Capital Advisors, LLC was placement agent for the deal, which involved pricing a registered direct placement of about 1.7 million common shares of Monmouth Real Estate Investment Corporation, a specialist in net-leased industrial properties.
Sidoti’s research team has a very strong position in covering small-cap and micro-cap companies, and the firm has built an extensive network of institutional investor clients. Sidoti claims to have the the Street’s largest sales team focused exclusively on selling small cap names to institutional investors. In the case of MNRTA, a relatively small and less actively traded REIT, Sidoti used its relationships in the financial community to identify and generate interest among small cap investors.
This is an interesting development in many ways, as an indicator of the type of opportunities that may be available to research providers that specialize in under-served segments of the market, especially in the aftermath of extensive downsizing at large banks.
Sidoti may be able to turn itself into a boutique investment bank for small cap companies; alternatively, the firm may choose to partner with a larger bank, providing its small cap expertise and sales force to work on deals managed by other firms.