Published on July 26, 2017 by Ramesh Punugu
Acuity Knowledge Partners conducted a global survey to understand how best-in-class asset managers organize their research teams to maximize efficiency and results.The survey, targeted at Chief Investment Officers (CIOs), Heads of Research (HoRs), Portfolio Managers (PMs), and investment professionals, focused on: a) asset managers’ perception of research, b) elements of the research process that seemed effective, and c) how asset managers optimize their research team’s time and budget.
Key takeaways from the survey:
- Most respondents were of the view that research was seen as a critical component of their ability to generate superior investment returns in their firms. Of the total number of respondents, 86% considered research as a primary driver to investment performance.
- A majority of the respondents felt that maintaining a disciplined research process was critical to driving superior investment returns. Additionally, most respondents felt there was scope to improve the performance of research teams with respect to the current research process and the teams’ ability to assimilate information overload.
- Research budgets across categories of asset managers seemed to have stabilized. However, asset managers were looking to optimize the research mix in favor of internal research rather than external research (brokerage research, independent research, and expert networks).
- When selecting research inputs for the investment research process, most managers placed the highest importance on research inputs that could directly drive investment performance. Most managers also preferred inputs with greater “depth” rather than “breadth” from internal and external research teams. Asset managers also did not consider “cost of research” as a top three factor when selecting research inputs.
- Most respondents wanted to increase time spent by in-house research teams on areas that drove investment performance. Approximately 63% of the respondents wanted to increase time spent on “idea generation”. An additional 50% wanted to increase time spent on “deeper company analyses”. While 90% of the respondents stated they were currently spending a lot of time on maintenance research, 50% wanted to decrease time spent on maintenance research and divert the bandwidth to value-added activities.
- Most respondents favored outsourced support, and almost 70% of them were willing to use it to supplement internal investment research. An additional 70% also mentioned they were looking to raise allocation to technology to automate portions of the investment research process and drive efficiency.
For more details on the survey, click here
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About the Author
Ramesh has over 20 years of experience in global capital markets – research and investment banking.Prior to joining Acuity Knowledge Partners, Ramesh worked with the offshore research and analytics units of Crisil and iGate, managing sell-side research and investment banking teams for global clients. He started his career as an investment banker at Ind Global Financial Trust (currently part of Ernst & Young’s corporate finance practice in India), advising companies on M&A and capital raising. He holds an MBA and a bachelor’s degree in Technology.
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