New York based investment bank, Seaport Global Securities, recently announced the launch of Seaport Research Partners (SRP), a platform that enables sell-side analysts to support and grow their research franchises.
Seaport’s New Research Platform
Earlier this week, Seaport Global Securities announced that it has launched Seaport Research Partners (SRP), a division of the investment bank that offers equity research analysts a new business model to produce and distribute institutional sell-side equity research. At present, sixteen analysts with an average of 20 years of experience have joined SRP. Currently, SRP provides research coverage on the Consumer, Energy, Financials, Fintech, Healthcare, Industrials, Materials, SPACs, Utilities, and Power sectors.
A few of the ranked analysts who have already joined SRP include James Mitchell, previously of Buckingham Research and UBS covering Banks & Brokers; Angie Storoyznski formerly with Macquarie Capital and HSBC covering Utilities, Power & Waste; Chris Brendler previously with Legg Mason, Stifel and Buckingham covering Fintech & Payments companies; and, Mark Weintraub formerly with Seaport, Buckingham and Goldman Sachs covering Paper, Forest Products & Homebuilders.
Tim Arthurs, Co-Head of SRP, explained the bank’s launch of the new research platform, “We are taking advantage of opportunities in the marketplace, adding stand-alone franchise value analysts and will continue to expand into additional verticals. We’re adapting to deliver what our customers value the most – high quality, alpha-generating content from trustworthy, best-in-class sources. As an early adopter seeking to capitalize on the changes in the equity research market for the long haul, our platform is driving innovation in an industry starving for change.”
Seaport is continuing to add experienced sell-side analysts who have an established research franchise and an entrepreneurial bent, who are interested in tying their financial success to the growth of their research franchises. Seaport will support SRP analysts by providing them access to over 3,000 existing institutional customers, 150 senior salespeople & traders across the cap structure, global equity and debt capital markets, a full suite of corporate access services including multi-sector and niche conferences and investment banking.
Seaport Global’s launch of its new SRP platform is an interesting development in the sell-side research model, as this if the first time an investment bank has built its research department by recruiting well-known analysts with existing research franchises, creating an entrepreneurial incentive structure, and enabling them to leveraging various aspects of the bank’s infrastructure to grow their research franchises.
Other firms like Jefferies or AnalystHub have marketed or distributed research created by third-party brokers or independent research firms. This has enabled these firms to leverage the research coverage of partners without having to incur the costs of producing the research themselves. However, none of these firms have done what Seaport is attempting to do – to enable franchise analysts to build and commercialize their own research franchises with the bank’s support, while also fully integrating these analysts with the rest of the investment bank.
Clearly, the changes in the research industry over the past decade have made Seaport’s novel approach workable. Commission compression and the shift from active to passive investing has put pressure on research payments. Simultaneously, MiFID II has led to research budget cuts and promoted juniorization of analysts at sell-side firms.
It will be interesting to see how Seaport’s SRP platform works. We suspect that as long as Seaport is able to recruit and keep high value franchise analysts, and the buy-side is willing to compensate these analysts appropriately for their insights, the model should be successful. And if it is, we would not be surprised to see other sell-side firms copy Seaport’s approach.