In The News

European institutional investors plan to cut spending on equity research by 1% in the next 12 months — in contrast to the 6% to 7% projections a year previous — ahead of new research payment unbundling rules, shows research by Greenwich Associates.

Kevin McPartland: “The bond market’s post-crisis liquidity decline has been spread across an increasingly diverse list of bond issues represents a challenge that is driving a search for new skills and new technology on buyside trading desks.”

The regulation that some expected would kill sell-side research isn’t doing so yet, according to a Greenwich Associates.

By next year, around 75% of financial firms will either explore or implement artificial intelligence technologies, according to Greenwich Associates. The research and consulting firm thinks some 15% of the industry’s jobs are at risk.

“The migration of clients to OCIO relationships has created another important touchpoint at the consulting firms: the Chief Investment Officer of the delegated business,” said Davis Walmsley.

“If providing buyers and sellers of corporate bonds with tools that allow them to trade with each other marks the first phase of the market’s evolution, gathering, analyzing and putting to work data is phase two,” said Kevin McPartland.

Spending on European research — which Greenwich Associates, estimated at $1.35bn a year for equity research alone — is expected to shrink.

This, in turn, will trigger a stronger focus on institutional managers working to meet clients’ specific investment outcomes – such as a pension’s liabilities, says Rodger Smith.

According to Greenwich Associates, a crypto desk could rake in $75m revenue a year.

Programs that employ AI are being actively researched by nearly all major institutions—a recent report from Greenwich Associates estimated that three quarters of banks and financial services firms will be using AI in some form.