MiFID prompts European fund managers to cut research budgets

Revised capital market rules known as MiFID II have prompted European fund managers to slash research budgets by $300 million (€250 million), according to a consultancy firm.

Greenwich Associates said that although investment managers had indicated they would economise on research the “aggressive budget cutting” is more than expected.

Under MiFID II research costs must be separated from trading costs.

Continental European equity research budgets were hardest hit, shrinking by over 30% year on year, compared with a reduction of only 17% by UK investors.

During the build up to MiFID II, UK investors were consistently better prepared than their continental counterparts thanks to the UK’s Financial Conduct Authority being a strong proponent of MiFID, Greenwich said.

While budgets have been cut a significant proportion of managers’ equity research budgets will remain unchanged since 2017. A third of respondents will pay researchers the same amount as last year.

Managers were concerned about the impression it would convey to investors if they made sudden and substantial cuts, Greenwich said.

©2018 funds europe

HAVE YOU READ?

THOUGHT LEADERSHIP

The tension between urgency and inaction will continue to influence sustainability discussions in 2024, as reflected in the trends report from S&P Global.
FIND OUT MORE
This white paper outlines key challenges impeding the growth of private markets and explores how technological innovation can provide solutions to unlock access to private market funds for a growing…
DOWNLOAD NOW

LATEST SURVEY

Visit our dedicated Ireland channel for all the latest news and analysis on the country's investment industry.
READ MORE

PRIVATE MARKETS FUND ADMIN REPORT

Private_Markets_Fund_Admin_Report

LATEST PODCAST