The European Union’s revised Markets in Financial Instruments Directive comes into force on Jan. 3, 2018. Among its core aims is reducing conflicts of interest between investment firms and their clients. In the past a portfolio manager might have received brokerage research for free, but under MiFID II that’s considered an “inducement,” which could sway the manager’s decisions about where to direct order flow. The upshot: Money managers will need to pay for investment research they receive
this is going to be huge. It may make the quality of research better and the industry might get stronger. It might destroy the industry. We shall see, based on some of the pricing figured I saw looks like JPM wants market share (maybe thinking research will still lead to sales) as they were priced pretty aggressively compared to Barclays & DB leaked figures
you know what i want? i want to jump from equity research to real estate acquisitions analayst for a real estate PE firm. Less volatile, tangible asset, and real hard cold cash flows for the owners.
I’m looking at doing the same thing. I’m not in ER though. I have a friend who works for a real estate PE firm that I’m trying to get in with… I’m trying to get his managers out to the golf course with me so I can start networking some more. In my opinion, real estate, specifically apartments, is a good place to be. Apartments are going up everywhere because no one wants to live outside the city anymore. Millennials don’t have the money for a house, so they’re going to apartments.
just moved to a RE PE shop and there is some money to be made. Everyone is at the opinion we are late cycle currently and awaiting a big downturn (which if your firm can withstand the pain you will make a killing on depressed asset prices followed by a bounce back and strong growth opportunities)
the only thing keeping me down is not having wealthy parents. i calculated that if i had wealthy parents and all the priivlages of wealth/education/connections i would be worth many millions
Anyway, about this MiFID thing - I can’t imagine how more rules and a more explicit fee structure would be conducive to industry growth. Fear of exorbitant future fines for even minor infractions tends to make financial firms less aggressive when new rules are introduced. Changes in the way firms are mandated to do business also makes future revenue less certain. This will make companies less willing to commit capital to equity research businesses until the effect of the new rules becomes clearer.
Even if research becomes more objective due to fewer conflicts of interests, I don’t know if clients will notice any difference, if they will even care, or if the difference makes the research conclusions more accurate.
lol at a hedge fund?? that’s really hard to believe but if you say so. Usually the owner or partners have multi millionaires if not billionaires…Are you in NYC…I want to ask about this shady ass fund to our know it all thundercat CFO.