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WatersTechnology: HSBC Invests in Visible Alpha

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Mark Dowd

Mark Dowd

Investment research technology provider Visible Alpha announced HSBC as its newest investor and will launch a research advisory board to help steer the vendor’s services toward what the needs of the marketplace.

HSBC invested an undisclosed amount in Visible Alpha as part of a funding round in January. The company previously raised $38 million from Goldman Sachs, Banco Santander, Exane, BNP Paribas, Macquarie Group, Royal Bank of Canada and Wells Fargo. Other investors in the firm include Bank of America, Citi, Jefferies, Morgan Stanley, and UBS.

Visible Alpha will use the investment for its growth initiatives and meet research valuation and budgeting requirements under the Markets in Financial Instruments Directive (Mifid II).

Scott Rosen, CEO of Visible Alpha, says the platform is attracting investors as the research industry is in flux, and it has become more important to ensure content provides value.

“The whole research industry is in flux, with the most obvious driver coming from Mifid II, but I think it’s also part of a larger trend of ensuring research is generating value for the buy side. Investors look to analysts to generate that value,” Rosen says. “Banks are recognizing that those changes are afoot and they want to work with us and create an impact on how the marketplace goes forward.”

He says the financial services industry spent the past year getting ready to meet Mifid II requirements but is now focused on making sure it gets value from activities like research.

Around 450 research providers participate on the platform with over 100 buy-side firms. HSBC, along with its investment, will also add its research analyst models to the Visible Alpha Insights and the Visible Alpha Consensus Data platforms.

Rosen says the vendor plans to work on further integrating the services of Alpha Exchange, which it acquired last year, with its Insights platform. He says Visible Alpha continues to expand the geographical reach and coverage of the research it offers.

Visible Alpha also set up a research advisory board consisting of its investors that will guide the company through the development of products and services.

“We want to make sure that as we roll out services, we are doing it in a way that is conducive to the growth of the research marketplace and we facilitate research on both sides,” says Rosen. “We are in constant communication with [people on] the buy side, who are the purchasers of our services, so we want to make sure we have the same relationship with the sell side and make sure we’re not just thinking in the short-term.”

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