Can you tell us about your business? We launched Alpha Exchange in 2016, with a co-founding team of three members who had both asset management and technical backgrounds.
Alpha Exchange is an intelligence network that helps asset managers and institutional investors cut through the market noise and make better informed financial investment decisions. We connect consumers of research with providers of content, in a collaborative platform for investment insight.
We also make the buying and selling of research accessible, transparent and compliant. This is important because at the end of 2017 the $20 billion investment research industry is undergoing a big change. At the moment, most asset managers don’t pay for research directly. The costs of research have historically been bundled into an opaque web of banking fees and pricing confusion. Until now. EU regulators have had enough. Known as the Markets in Financial Instruments Directive (MiFID) II – this is being implemented on the 3 January 2018. For the first time research will need to be transparently priced – a fundamental shift for this industry.
This will force an investment bank to put a hard dollar price on its whole research product.
So this is a huge opportunity for you? Absolutely. Until now, this has been an unpriced industry, with the cost of research being bundled in an opaque way – leading to banking fee price confusion.
From the start of next year all research emails, reports and calls with research analysts have to be transparently priced and monitored. Our infrastructure brings all these groups together and distributes content in a clear and compliant manner. With research having to be priced, and research budgets needing to be set, asset managers will have to report to clients in a very granular way. Alpha Exchange provides the technology for these firms to comply. Our tech is embedded across an asset management firm with real time monitoring of research consumption to provide great data and analytics to inform research payments.
This service helps the consumer justify and scrutinise their research consumption.