Forefront Communications

Markets Media: 2020 Outlook: Mike Kronenberg, Analyst Hub

Alexandra Hamer

Alexandra Hamer

Mike Kronenberg is the Founder and CEO of Analyst Hub.

What were the key themes for your business in 2019?

Mike Kronenberg, Analyst Hub

2019 was the year that banks took meaningful action in complying with MiFID II and the unbundling of research and trading. One measure included the banks severely cutting back on their trading desks, sometimes eliminating them, and also restructuring their equity research arms. These are two trends that I anticipate will continue into 2020.

These shifts in business strategy have complemented our mission of empowering sell-side analysts to leave the uncertainty of institutional research and start their own businesses. Launched in 2018, Analyst Hub is an independent research infrastructure platform that provides talented sell-side analysts the tools needed to own their own enterprises. Since inception, Analyst Hub has enabled 19 analysts to launch their own businesses.

What trends are getting underway that people may not know about but will be important?
With MiFID II shrinking the research pie, the sell-side model has become more ‘pull’ than ‘push’ resulting in firms reassessing their business strategies. The new transparent pricing model has shown the amount of research available from the large institutions significantly outweighs the buy side’s appetite for it. Because of this imbalance, we are seeing very established, highly recognized firms evaluating if they should exit the sell-side research business completely. Firms abandoning the research business will help their competitors, however large numbers of equity research analysts will be without jobs as we’ve seen happen numerous times this past year. According to Coalition Development, research analyst headcount at the twelve largest investment banks dropped 8% to 3,500 in the first six months of 2019.

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