Extel alpha capture results – 2013 survey22nd July 2013
LONDON, 22nd July 2013 – Brokers Evolve to Meet Client Demand as Alpha Capture Grows in Importance to the World’s Largest Fund Managers.
TIM Group reports that results of the latest Extel survey reveal the share of buy-side commissions paid for trade ideas has increased in the last year. Trade ideas now form an increasingly important part of the service provided by brokerages for their institutional clients and now represent a 15% share of overall commissions paid by the buy-side, up from 13.5% the previous year.
Additionally the results show that the majority of clients utilising alpha capture, are the highest payers of commission overall. Over half of respondents were in the two highest-paying brackets as defined by Extel.
TIM Group operates TIM Ideas, the market-leading electronic alpha capture platform. Alpha capture is a way of distributing trade ideas systematically rather than through phone calls or unstructured emails. TIM Ideas has over 4,000 equity salespeople actively entering trade ideas.
Tom French, Business Strategy Director at TIM Group noted that “the broader investment market is now recognising the beneficial effects of alpha capture for driving fund performance and getting value from their brokers”.
The report also shows that 60% of sell-side firms saw alpha capture increasing in importance to them over the next year. Likewise 55% have seen their clients increasing the proportion of commissions they allocate to alpha capture.
When considering what’s at the heart of this growth Mr. French noted that “the benefits of alpha capture are numerous. It facilitates access to more frequent information on a broader range of stocks than research reports, and from brokers with varying specialisms. It is more objective and transparent than phone calls or emails, increasing accountability. Above all the performance data actually proves there is a lot of investment value in the ideas brokers are creating.”
This is the second year that Extel have included an ‘Electronic Alpha Capture’ category in their market-leading survey of the investment industry.
Steve Kelly, Managing Director of Extel said “electronic alpha capture services are increasingly valued by asset managers, and we have seen a solid growth in voting in this category. The votes are led by the major sell-side houses, and we anticipate even higher participation in 2014, as alpha capture becomes integral to every broker’s offering to their clients.”
About TIM Group
Founded in 2005, TIM Group has become a worldwide leader pioneering the development of alpha generating technology, used by institutional money management and brokerage firms to maximise the value of intellectual property and generate increased revenue. For more information, visit www.timgroup.com.
About the Extel Survey
The survey collects views and votes from fund managers about services and advice they receive from research analysts and equity sales people at stockbroking houses. Considered the leading benchmark for excellence in investment banking and asset management, the pan-European survey highlights achievement across these industries. For more information, visit: http://www.extelsurveys.com/.
Natalie Hall, Marketing Manager, TIM Group, at +44 (0) 20 7826 4308 or firstname.lastname@example.org