Thursday, December 6, 2007

Fun (or not so fun) facts about Wall St research

We pulled together some facts around sell-side research for a press interview I gave this week, and when you put them all in one place it’s a sobering picture. Did you know that:

- Between Jan 2002 and Jun 2006, 703 public companies have been orphaned and have no analysts covering them – according to Reuters

- 35% of public companies in the U.S. now have no coverage

- An additional 30% are under-covered (they have less than 3 analysts)

- The number of analysts working for the 10 largest investment banks has declined 21% to 2,641 as of November 2006 from 3364 analysts in 2001 – according to Thomson Financial

- The Tabb Group estimates that the total number of analysts fell by approximately 42% from 2000 to 2006 with expected declines reaching an additional 35% by 2008.

- and so… not surprisingly Integrity Research Associates estimates that buy-side institutions will increase spending on internal research capabilities by 28.8% over the next few years from $5.8 billion in 2006 to $7.4 billion in 2011.

No wonder "alternative research" products like search-driven research, expert networks (like Gerson Lehrman) and independent research are exploding.

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