Adventity provides comprehensive research services to buy-side clients ranging from hedge-funds to investment banks. We follow a fully customized approach to meet clients’ requirements with services ranging from heavy-lifting “number-crunching” to creation of complete investment memos. Adventity analysts not only carry out detailed opportunity assessment but also track portfolio securities on a continuous basis. For many of the clients our analysts act as virtual in-house analysts even to the extent of participating in their investment committee meetings. Our research coverage spans across asset classes, sectors and geographies. The 100 plus buy-side research team at Adventity comprises MBAs, CFAs, Chartered Accountants, and Masters in Finance.

Buy Side Research Outsourcing

Regulation FD (2000) and the Global Settlement (2003) have dramatically changed the investment research landscape. The former restricted the availability of non-public and selective information to sell side analysts (their most important edge), while the latter separated sell side research from investment banking. As a result, sell side research, now bereft of the lucrative fees from investment banking, experienced squeezed budgets leading to reduction in coverage.

These developments had important ramifications for the buy side. Historically, the buy-side used to rely on free sell side analysis for much of its basic research. In an environment of super high investor expectations, asset managers have to look for gems in an ever expanding choice of investment alternatives, thus calling for greater research coverage. However, with the sell side under pressure, many buy side firms are forced to weigh other research options – bolster in-house research or depend on independent research providers. However, these are expensive options, especially for the smaller and mid-size firms. Further, forced to survive on trading commissions, the sell side tried to push research with a view to generating trades – creating the so-called “sell side noise”. This, coupled with the rising cost of research, has made investment research outsourcing a compelling alternative to in-house and independent research.

Adventity Buy Side Research

Fully Customized, High Quality, Cost Effective, Timely and Efficient

Adventity has been in the business of investment research outsourcing right from the time this concept was being debated. We have seen investment research outsourcing evolve, witnessed and addressed the skepticism that came with it, made clients see the value proposition in it, and strove hard to raise the perception of it. This valuable experience allows us to not only appreciate the objectives of high quality, timely and efficient research (for generating the all important higher alpha) of our buy side clients well but also understand their constraints of cost, time and compliance. We also deeply appreciate the fact that in buy side research one-size-fits-all does not work. We understand that each client is unique in its investment philosophy and in its work culture. This understanding, coupled with our experience and expertise, allows us to adapt to our client’s way of doing things and provide highly customized, high quality, cost effective, and efficient research solutions.

We provide customized research in pursuit of unique trade ideas, first-hand opinions not tainted by sell-side “noise”, and dedicated teams of “virtual analysts” to work closely with in-house analysts & portfolio managers.

Extensive Research Coverage

When markets are upbeat one can sell beta for alpha but in the long run this is not sustainable. In their endeavor to generate higher alpha, asset managers have to constantly search for opportunities across the vast array of investment alternatives available. To aid buy side firms in this, investment research outsourcing firms have to have expertise across asset classes, sectors and geographies. Adventity’s buy side research coverage spans across assets classes – equity, convertibles, fixed income (investment grade, high yield, leveraged loans, distressed debt, etc), and structured finance (CDOs, MBS, etc). Our research coverage includes almost all the major sectors – telecom, retail, energy, healthcare, financials, utilities, and real estate, spread across the globe – US, Europe, Asia and Emerging Markets. Our analysts are trained in research across strategies ranging from global macro to relative Value and from directional to event driven.

• £100 billion UK based fund manager with investments in equities, bonds and properties
• $50 billion investment management corporation specializing in high yield securities and distressed debt
• $14 billion multi-strategy, multi-asset class hedge fund with investments and offices in US, Europe and Asia
• Multi-billion dollar proprietary fund of US based bulge bracket investment bank with investment strategies including investment grade, high yields, converts etc
• Multi-billion dollar multi-strategy hedge fund with offices in New York, London and Singapore
• $7 billion distressed/event driven hedge fund client with offices in New York and London
• European CLO manger with €1 billion of leveraged loan assets under management
• $30 billion global fund of PE/VC funds
• $2.5 billion multi stage award winning Silicon Valley VC firm

Research Process - Covering the Entire Investment Lifecycle

• £100 billion UK based fund manager with investments in equities, bonds and properties
• $50 billion investment management corporation specializing in high yield securities and distressed debt
• $14 billion multi-strategy, multi-asset class hedge fund with investments and offices in US, Europe and Asia
• Multi-billion dollar proprietary fund of US based bulge bracket investment bank with investment strategies including investment grade, high yields, converts etc
• Multi-billion dollar multi-strategy hedge fund with offices in New York, London and Singapore
• $7 billion distressed/event driven hedge fund client with offices in New York and London
• European CLO manger with €1 billion of leveraged loan assets under management
• $30 billion global fund of PE/VC funds
• $2.5 billion multi stage award winning Silicon Valley VC firm

• Business segments and value chain analysis
• Industry analysis; competitive landscaping
• Identification of risks and mitigants
• Quality and background of management / strategic investors
• Financial modeling
• Analysis of off-balance sheet items
• Projections; scenario building
• Worst case scenarios; scrutiny of liquidity
• DCF, relative valuation (equity multiples and HY comps-analysis of spreads), distress/asset based valuation
• Asset and multiple based recovery
• Covenants analysis and comparisons
• Deal structure due diligence
• Determination of investment class

• Company fundamentals (monthly / quarterly results, trend analysis, KPI performances)
• Mapping risk factors to portfolio returns
• Calculate risk estimates (VAR, marginal VAR, conditional VAR, expected shortfall, etc.) using parametric/historical and Monte Carlo simulations
• Back-testing
• Estimating risk adjusted performance, VAR
• Generate trade ideas
• Creation, installation & maintenance of custom IT enabled databases & interfaces