Does Outsourcing Equity Research Really Improve Firm Performance?

By Author: Ankit Kohli
Total Articles: 20
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If you run an equity research firm, you already have your hands full. Don’t spread yourself too thin. Outsourcing equity research can free up time and resources so you can focus on the sell side—organising corporate roadshows, idea generation, deal making, etc. Companies offering investment research support services possess the expertise across geographies and industries, and with their help, you should be able to expand the depth and scope of your in-house equity research activities. When you outsource equity research, you are hiring an efficient investment research team that can deliver the right financial model within an agreed timeline, based on your guidelines.

The practice of outsourcing equity research is here to stay. According to industry research, outsourcing data analytics, management, and data mining makes up $1.2 billion of the $6.2 billion knowledge process outsourcing industry—a figure that is projected to increase to $3.3 billion by 2020. By outsourcing equity research, your firm can have access to world-class talent that can conduct critical analysis, like VAR and sensitivity analyses. The service can help investors discover ways to allocate their funds profitably.

There are many reasons why outsourcing equity research can improve the performance of a firm. For one thing, it enables a firm to have access to best-in-class information without hiring and training additional employees. For a small sell-side firm, this can help them save money and not be bothered with additional overhead costs. Moreover, service providers are able to tailor their research to the needs of every client.

Seasoned investment professionals understand that there are limitations to what they can do and achieve on their own. Hence, they rely on viable resources to obtain the best investment and research opportunities so they can have more time to manage their business and lower their costs in the long run. A leading provider of outsource equity research can cover a range of services like maintenance, development of financial models, and company coverage. Using their services, your firm should be able to create and update financial models, create end-to-end coverage reports, and initiate coverage reports. You get valuation support from the same team of experts, too.

About the Author:
Pure Research Private Limited (Pure Research) provides customised research and business intelligence to leading corporates, public sector organisations, financial services firms, and professional services firms. The company specialises in providing high quality procurement and supply chain intelligence to CPOs and procurement professionals worldwide. Analysts from Pure Research work as an extension of its client’s procurement teams to deliver high quality insights on suppliers and supply markets. The company has offices in London, U.K. and New Delhi, India.