Equities research house Redburn gains investment from Rothschild & Co

Investment by Rothschild & Co will help Redburn as it looks to exploit changes to research under MiFID II.

Rothschild & Co has made a minority investment in European agency broker and equities research specialist Redburn, as the firms looks to capitalise on the investment research fallout of MiFID II.

The investment will provide Redburn with capital for expansion of its research coverage of new companies and geographies to clients, and offer employees greater equity participation. Terms of the investment were not disclosed.

“Redburn has established a market-leading position at a time when equity research providers have experienced significant dislocation following the introduction of MiFID II,” said Richard Wyatt, partner and chairman of equity and investor advisory at Rothschild & Co. “This dislocation has led to a general contraction in the depth and quality of research coverage. We want to help Redburn capitalise on the opportunities this presents.”

Europe’s MiFID II regime has overhauled how asset managers pay for and consume research, but many market participants have voiced concerns that the new rules have led to a decline in research quality and coverage. Sell-side institutions have been forced to adapt to the new trading landscape and a decline in buy-side research budgets. The effects are also being felt outside Europe, with US asset managers adopting MiFID II-like strategies despite being under no regulatory obligation to do so.

Earlier this month, France’s markets regulator established a team to investigate the impacts of MiFID II on research since it came into force, with a particular focus on the alleged decline in coverage of small- and mid-cap companies.

“This exciting strategic partnership, with one of the leading firms in financial services, will provide Redburn with the financial firepower and support to grow its franchise in new client markets, and to build on its position as the leading independent player in European equities,” Jeremy Evans, senior partner at Redburn, concluded.

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