Rising need for quality information among investment managers

Many individuals rely on experts in investment management and wealth management in general to help them make the most of their money. According to a report on Financial News, specialists in this field are increasingly relying on gaining quality information in order to achieve the best results.

The news source pointed out that in some instances, people sail “too close to the wind” in their efforts to stay ahead. One example of this involved Raj Rajaratnam, who was recently jailed for trading on insider information.

However, investment management experts say that using external research sources is both legitimate and valuable.

The news provider noted: “Independent research firms offer independent analysis of macroeconomics, sectors or individual companies and are viewed as not having conflicts of interest, which is seen as endemic in sellside research.”

Meanwhile, commenting on the issue, a wealth management specialist and partner at a long/short equity hedge fund remarked: “We use expert networks to understand competitive dynamics in industries, to understand how a company fits into an industry, its strengths and weaknesses and how it interacts with other companies within that industry.”

The expert added that it is useful to try to gain a deeper understanding of how firms work from people who actually operate in the industry, as opposed to spokespeople from the organisations themselves.

A fellow investment manager revealed that he is currently working with a geologist via an expert network to investigate a discovery made by an oil company. He noted that he is keen to find out whether it is credible to find oil in that particular location.

Also commenting on the issue, head of Marex Spectron Independent Research Services Jamie Stewart said there has been a significant rise in bespoke research mandates analysing a range of topics, including the global beef industry, aluminium smelting, electricity generating and container shipping.

Leave a Comment