Why we do it

Rapid growth potential makes small companies very attractive to fund managers, stockbrokers and professional advisers who manage funds for private investors. However, without sufficient first class research to reassure the regulatory authorities that the fund manager has conducted proper due diligence before investing, fund managers will not invest.

Small quoted companies do not generate enough stockbroking commission to fund research. Less than 3% of all stockbroking commissions are generated by companies capitalised below £300m.

"According to research from Thomson Financial First Call, more than half the companies quoted on NASDAQ are not covered by a single investment analyst. And yet 76% of investors say that they are more influenced by analyst research than by annual reports or any other information source."

from Research is a requirement, not a luxury by Andrea Kirby

Without adequate research:


  • Small companies get overlooked during investment deliberations and decisions.
  • Investors will not perceive the value in their shares.
  • Existing shareholders will switch to shares in other companies which receive better coverage

Although stockbrokers produce research on their corporate clients, this is only circulated among their own clients and will not raise a company's profile with other fund managers or the public. As a result, these fund managers, and other stockbrokers interested in the company, are not able to obtain the appropriate research needed for investment purposes.

We are glad to see that KPMG, in its paper "Investing in SQCs", sees our kind of independent research house as a way forward for smaller companies which have seen commission-hungry stockbroking firms cutting analyst coverage. Indeed, KPMG says that "These agencies... offer SQCs the opportunity to place information about themselves in the market place, with a level of detail that analysts at securities houses could not justify producing." The relevant page of the document is available as a pdf file, reproduced with permission of KPMG Corporate Finance.

Our research material is widely available in the UK market and overseas through Bloomberg with circa 250,000 subscribers from the world’s central banks, investment institutions, commercial banks, government and news organisations, Thomson First Call and Thomson Reuters reaching over 50,000 institutional investors and brokerage firms around the world and FactSet covering over 24,000 companies in the Americas, Europe and Asia Pacific. Earnings estimates are also available through Fidessa Group’s global network serving around 22,000 users across 520 clients globally.