As new rules spur Wall Street banks to further shrink their research budgets, U.S. asset management firms are shoring up in-house research, and reinventing the stockpicking business in the process.
Fund managers are eschewing the traditional model of teams built to cover a broad range of industries, instead picking areas of expertise and hiring analysts with very specialized knowledge and often non-Wall Street backgrounds.
The European Union’s MiFID II regulations that target conflicts of interest and took effect in January require asset managers to separately report trading commissions and investment-research payments. In the past, banks bundled research with trading fees covered by investors rather than fund management firms.
