Substantive Research, a research discovery and research spend analytics provider for the buyside, has published findings of its latest equity Analyst Mapping study showing that the brain drain in investment research has stabilised.
Substantive Research, a research discovery and research spend analytics provider for the buyside, has published findings of its latest equity Analyst Mapping study showing that the brain drain in investment research has stabilised.
In its first Analyst Mapping report published at the end of 2020, Substantive Research found that since MiFID II came into effect, there had been a 12 per cent loss of analysts in Europe vs a 4 per cent loss in the US, as buyside budgets and research pricing decreased globally but more significantly in Europe.
In previous research coverring January 2018 to December 2020 Substantive Research found that nearly 7,500 years of net analyst experience had been lost
The company’s lates Analyst Mapping Report covers data spanning the first three quarters of 2021. The study, which covers 50 firms with AUM between USD30-800 billion, split 70 per cent Europe/UK and 30 per cent US, 80 per cent Long Only and 20 per cent Hedge Fund, reveals that the brain drain in investment research has rapidly decelerated in 2021. Only 296 years of net experience have lost to the supply side of the market globally, compared with almost 7,500 over the previous three years
In terms of analyst headcount, Europe has now stabilised with an increase of 1 per cent in 2021, coupled with net 45 years of experience lost.
In the US, analyst team headcount decreased by 1 per cent, with a net loss of 251 years of experience in the market.
The devil is in the detail – whilst the post-MiFID II shock initially hit all providers similarly in terms of lower research payments, this is now a fragmented market where each broker is having its own unique experience in terms of its pricing power and ability to commit to quality and coverage from a cost perspective.
