London-based sales agent Ed Blad has increased the roster of firms he is representing to 75 independents in the six months since launching his new firm, Independent Research Forum. The environment for boutique research seems to be improving as asset managers are reforming their research procurement procedures under MiFID II.
The appetite for independent research has been expanding in London despite a long drawn-out process of implementing MiFID II. Blad says that macro-oriented research is popular and he is looking to add more macro-oriented providers. Fundamental research is also selling well, particularly high conviction ideas on the short side.
The firm has set up 200 buy-side introductions for clients over the last six months, of which 28 have generated new business so far. There are around 40 trials still pending.
Independent Research Forum is looking to recruit additional staff to continue sales momentum. The firm is also planning a regular newsletter on independent research and expects to host events showcasing IRPs.
Blad has been distributing independent research since 2007, when he joined Eden Financial’s Independent Research unit, the predecessor entity to Marex Spectron’s Independent Research & Commission Management group. Eden Financial’s unit was founded by Jamie Stewart, who ran Instinet’s independent research distribution operation from 1999 to 2002. Stewart is a Senior Advisor to Independent Research Forum.
Unlike Marex Spectron, which is paid through the commission trading of its buy-side clients who seek independent research, Independent Research Forum is paid through revenue sharing with independents.
An informal poll of Euro IRP firms suggested that European-based independents have been growing their revenues in 2016 despite a declining cash equities environment, and are even more bullish on prospects for 2017 when new research procurement processes will begin to be implemented by European asset managers. Independent Research Forum’s success in generating sales seems to be part of a larger trend benefiting research boutiques.