Seed Alpha, a new technology that changes the way institutional investment research is managed and delivered, was launched today. With early adopters such as Ballingal Investment Advisers, it solves the issues that both buyside and researchers face as regulators look to change the way equity research is paid for.
With the practice of using dealing commissions to pay for research in flux in Europe, no matter the final settlement of these issues under MiFID II, the one certainty is that there will be a dramatic shift the way research is consumed, priced and valued right across the globe.
“These changes cannot be underestimated – they will have repercussions across all regions,” said Seed Alpha co-founder Edward Stockreisser. “Most asset managers are not set up to meet these proposed changes, and this is where Seed Alpha can help. It’s about improved transparency, accountability and efficiency.
The cloud-based platform provides a single space for buyside firms to manage their research while delivering them content from research providers in a format similar to popular online music platforms. It provides a completely transparent audit trail showing who is using the research and what was paid for it. For researchers, it provides instant access to potential consumers who otherwise would have been time consuming and costly to reach.
“We, along with the rest of the industry, have been looking for ways to manage the research bill that allow us to demonstrate best practice to our clients,” said Andrew Ballingal, Founder and CEO, Ballingal Investment Advisers. “Seed Alpha gives us the ability to effortlessly manage the vast amounts of research we consume, while providing an audit trail for customers and regulators. We’ve seen increasing demand from our investors to know exactly what their money is paying for in terms of research and commissions and this is a great way to easily demonstrate that what we’re paying is adding value and alpha to their portfolios and investment process.”
Additionally, the technology solves the challenges the buyside face in sourcing ‘best research’, said Mr Stockreisser. “It’s always been hard for managers to cut through the noise to find research that really generates alpha,” said Mr Stockreisser.
The technology solves the challenges the buyside face in sourcing ‘best research’ by gathering all the research on to one searchable, intelligent platform that learns and adjusts according to user behaviour.
Co-Founder Mr Shan Han said he fully expected Seed Alpha to create waves. “Bringing sudden and full transparency to a previously opaque industry is going to be uncomfortable for some, no question about that,” he said. “But what you’ll see as this kind of technology gains traction is a genuine change in favour of quality providers. If their research is good, the buy side will demand it. We want everyone to be talking about ‘best research’ and finding it through Seed Alpha.”
