According to a recent article in the FT, some of Europe’s best banking and insurance sell-side analysts are banding together to launch an independent research boutique this fall.
Autonomous Research will work to combine both equity and credit research under one roof independent of an investment bank entity. It’s hard to find good independent research on both stocks and bonds.
From the FT article:
Autonomous Research, headed by Stuart Graham, a former Merrill Lynch banks analyst, will focus on both equity and credit research on Europe’s top banks and insurers. It has already secured authorisation from the US Securities and Exchange Commission and is awaiting clearance from the UK Financial Services Authority.
Instead of going on retainer, it appears that Autonomous will work on soft dollars — using actionable ideas to sell clients and capturing trading commissions.
The UK market for independent research hasn’t seen the likes of established sell-side analysts transitioning out of investment banks to set up their own shops — something of a trend underway in the U.S.
According to Integrity Research:
Since the insertion of Arete in 2000 by ex-Goldman Sachs technology analyst Richard Kramer, the UK independent research space has not seen new entrants established by former top-ranked analysts. This trend differs from the US independent research industry where former sell-side analysts have tapped into the industry’s maturity to set up shops. Starting in 2006 with Dana Telsey (ex-Bear Stearns), this trend in the US continued in 2007 with Ivy Zelman (ex-Credit Suisse), followed in 2008 by Ed Wolfe (ex-Bear Stearns), and most recently with Meredith Whitney (ex-Oppenheimer).