Research days are numbered. (Part 1)
Research days are numbered. (Part 1)Research is a major cost center. It used to be coupled with marketing IB services. Yet the Research/IB relationship has been de-coupled. Mid-tier firms will find it difficult to sustain full coverage research teams. You’ll see the major firms enhance their research capabilities, while other firms sell-off. The true research team may wind up at the ratings houses (Moodys, S&P, D&B, Fitch) and market news/data companies (Bloomberg, Reuters/Thompson).
Prudential closes stock-research department
Prudential Financial ended a 25-year run with involvement in the Wall Street securities business this week when it said it would shutter its well-known stock-research department. The insurance giant attributed the move to bigger rivals and lower stock-trading commissions.
Prudential closes research operations
By Darla Mercado
June 6, 2007
Prudential Financial today announced that it would close its equity research and trading business business, Prudential Equity Group.The group will drop coverage of all the companies it covers and shut down offices across the globe causing some 420 employees to lose their jobs.
Prudential’s latest move marks its exit from the securities industry.
The insurance giant made its Wall Street debut in 1981, upon acquiring retail brokerage Bache Halsey Stuart Shields and forming Prudential-Bache Securities, according to Reuters.
Prudential had been losing ground, unable to keep up in the research and trading businesses, a Prudential spokeswoman told Reuters.
Just this March, Prudential lost analyst Michael Mayo and his research team to Deutsche Bank. Prudential started trimming costs in its trading business in 2003 with the sale of its retail brokerage and investment banking units to Wachovia, forming Wachovia Securities.
full article
equity research, research, IB, downsizing, hedge funds, independent research, company-funded research
Labels: company-funded research, downsizing, equity research, hedge funds, IB, independent research, research
posted by Victor Lloyd Smith @ 5:33 PM
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