After more than two years since its launch, New York based Seaport Research Partners (SRP), is continuing to add research analysts and salespeople across the globe to support and grow its unique sell-side research platform.
SRP – Building on Past Strength
In early April 2021, Seaport Global Securities announced its launch of 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 and exclusive events. At launch, SRP provided research coverage from 16 analysts with an average of 20 years of experience covering the Consumer, Energy, Financials, Industrials, Materials, Utilities, and Power sectors.
Now, more than two years later, SRP continues to expand its research platform with more than 23 senior research analysts on board covering more than 40 sectors, and hosted over 300 corporate access events last year. Also, the firm is in touch with a number of potential analysts currently going through the due diligence process with buy-side clients and covered companies.
A few of the ranked analysts who are part of the SRP platform include James Mitchell, previously of Buckingham Research and UBS covering Banks & Brokers; Angie Storoyznski formerly with Macquarie Capital and HSBC covering Utilities & Power, Ken Zener formerly with Key Banc and Deutsche Bank covering Home Builders & Building Products; and Mark Weintraub formerly Goldman Sachs and Buckingham Research covering Paper Packaging & Forest Products.
Seaport is continuing to add experienced sell-side analysts who have an established research franchise and an entrepreneurial bent, who are interested in basing their financial success on the growth of their research franchises. In fact, more recently, SRP added David Joyce, Senior Media and Technology analyst from Evercore ISI and Barclays, Victor Cossel, Macro Strategist from Evercore ISI and Piper Sandler and Laurie Hunsicker, Senior Financials Banks Analyst from Compass Point and Stifel.
A few of the key benefits Seaport offers potential SRP analysts include; independence, autonomy, access to more than 4,000 existing institutional customers, 210 senior salespeople & traders across the cap structure, a full suite of corporate access services, a team of dedicated research salespeople, investment banking, and all the tools and infrastructure the analysts need to produce their research. Prospective SRP analysts have the flexibility to create innovative research offerings that buy-side clients want to pay for.
Seaport Global’s 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, created an entrepreneurial incentive structure, enabled their analysts to commercialize their research franchises with the bank’s support, while also fully integrating these analysts with the rest of the investment bank.
While SRP has taken a slow and steady approach to growing its business over the past two years, it has clearly gained traction with the buy-side. Part of the reason for this is because SRP only hired the analysts the buy-side was willing to pay. In addition, SRP’s research is distributed in a restricted manner, only to an exclusive number of clients who pay each analyst, meaning that each analyst is working with a limited number of clients. This is very different than the traditional sell-side model where an analysts’ research is sprayed across the street.
It is interesting to note that SRP management sees considerable growth ahead for the platform. They are targeting almost doubling their current research team in the U.S to 40 analysts covering all sectors, including healthcare, technology, internet, FinTech, insurance, REITs, beverages, household products, and lifestyle. Two of the firm’s near-term goals are expanding the SRP platform to Europe and Asia. In fact, the firm is currently adding dedicated research sales in London, with plans to add research analysts, salespeople, and trading in both the EU and Asia in the second half of this year
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 most sell-side firms.
It will be interesting to watch the continued growth of the SRP platform as the firm tries to continue recruiting and keeping high value franchise analysts. Ultimately, this will only work as long as the buy-side is willing to compensate these analysts appropriately for their insights. If both of these things take place, we would not be surprised to see other sell-side firms try to copy the SRP model.