Global Research Budgets: Survey Results
Reflective of current market dynamics, the majority of surveyed buy side firms expect research consumption to rise, but budgets will remain the same or fall in 2022/3.
In a recent survey, capital market participants were asked to identify where they believed the key pressure points on research budgets would be over the coming two years. ESG was identified as the primary pressure point, by a significant margin, although a minority also identified new asset classes, asset owner pressure and market uncertainty as factors.
In considering whether research content and service consumption would rise or fall in the coming two years, the majority of respondents felt that consumption would rise, and a significant minority felt that consumption would remain level.
When asked whether research budgets would rise/fall or stay the same, less than 20% predicted a fall in research budgets, with the remainder – some 81% – split between rise and stay the same.
Take away: these results present us with a scenario where ESG and other developments are putting pressure on the provision of traditional research. Given that more respondents expect increased consumption than see a rise in research budgets, a squeeze is likely, with some investment managers possibly turning to alternate sources for their ESG and other new data requirements.
The need to understand the consumption patterns of clients and the value they derive from their research has never been greater for sell side firms, and for buy side, the need to monitor research consumed and valued vs contract is essential in order to best allocate scarce resources. Singletrack’s advanced capital markets CRM and research engagement platform delivers intelligence to drive smarter decision-making and more profitable relationships.
About the survey respondents: This survey was completed by 129 respondents, 73% buy side, the remainder sell side, located in USA and Europe. The roles were typically Portfolio Manager, Analyst and Research Procurement.