When it comes to MiFID II, what does not kill active managers will make them stronger.
So say some industry analysts, whose views run counter to a common opinion among institutional investors — namely, that required research-cost transparency under the European Union’s Markets in Financial Institutions Directive II will make it more difficult and costly for active money managers to obtain analysis on what stocks to buy or sell.
Among other things, unbundling will prompt research to be viewed in terms of its actual return on managers’ investment, said Charles Poliacof, New York-based chief revenue officer at Visible Alpha, which provides data on investment research to money managers. “If (managers) look at research in terms of return on investment, providers will have to focus on presenting a great research product — for the sell side as a business and the buy side as an investment generator,” Mr. Poliacof said. “By asking for unbundling, regulators are putting the focus on best execution and requiring a valuation framework for research. … With MiFID II, regulation can become a source of ROI.”
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