New RMS Provider Focuses on Buy-Side Privacy Concerns

In the wake of increased attention to privacy issues, startup ContentStreet is launching a research management solution designed to limit brokers’ ability to track usage of research content.

ContentStreet is a cloud-based research management platform which sources broker content through API feeds, eliminating email delivery of research content or the need for users to go to various research portals.  All content is pre-tagged under RIXML standards allowing integrated searches by ticker, sector, geography or topic, among other attributes.

The key selling point for the new system is privacy control – data about buy-side access to the research content is private, allowing asset managers to control whether and when to supply the data to their sell-side brokers.  “Buy-side firms are increasingly questioning whether brokers should have immediate access to research readership data,” said ContentStreet’s CEO Paul Warme in an interview.  “Our solution allows the buy-side to generate and collect their own readership data, and decide if they want to share that data and, if so, when.”

Warme, who was co-founder and CEO of independent boutique Lusight Research, acquired a research authoring tool called Compose from Thomson Reuters in 2014.  His initial vision was to create a research authoring platform for mid-tier brokers that was fully componentized.  However, feedback from the buy-side was that they hated the concept of digitizing each research component such as tables and graphs, fearing that it would allow the sell-side even greater visibility into their workflow.  As a result, Warme pivoted the product concept, re-purposing the Compose development team from research authoring to creating a fully private buy-side RMS platform.

In a nod to MiFID II, the system also includes a reverse entitlement feature, allowing buy-side firms to manager their subscription controls, filtering out unwanted research content.

Any research provider that supplies research content to market data firms such as Refinitiv or Factset could feed their research into ContentStreet.  Similarly, any of the 700+ research providers that use BlueMatrix Courier to disseminate research may add the ContentStreet platform as a destination.  The system includes a publishing tool that allows smaller independent firms to incorporate their content.  Buy-side users can also publish their own internal notes/reports which are co-mingled with third party content.

Convergex veteran John Meserve, who served as president of rival StreetContxt, acts as an advisor to the firm.

ContentStreet currently employs four full-time staff and four outsourced salespeople, including Robin Howard who was co-founder of an early broker vote system, Financial Sockets, which was sold to State Street in 2008.  Financing is currently bootstrapped.

Our Take

MiFID II has made interactions data increasingly vital to research fee negotiations, so readership data has intrinsic value in determining research costs.  TABB Group has argued that research management systems will become the research equivalent to order management systems used to track trading and transaction costs.

At the same time, the buy-side fears leakage of the data might tip sell-side trading desks about pending transactions, a concern which hasn’t been helped by reports that hedge funds have requested anonymized interactions data from sell-side sources.  Yet another variety of alternative data…

More broadly, privacy is a thème du jour from Facebook to GDPR.  It is no surprise that asset managers are beginning to question brokers’ entitlement to sensitive data on research usage.  Because the data is ultimately tied to research payments, ContentStreet users will likely share the data, at least with their more significant research relationships, but will do so increasingly on their own terms.