By 2009, Institutional investors are expected to spend about 28% less on sell-side equity, an estimated $3.9 billion, down from $5.4 billion in 2004, according to a report by Integrity Research Associates. Michael Mayhew, CEO of the Darien, Conn.-based firm said sell-side research firm “has seen its heyday,” with those firms seeing their share of the equity research market slide to 33% in 2009, down from 58% in 2004. Among the reasons cited by the report is the fact that “institutional investors will rely more on their own internal research capabilities and because “falling commission rates undermine the economics of the sell-side research business.”
