Faq's

Extensive market feedback has revealed that smaller quoted companies and investors feel underserved in an environment where, in practice, large companies have been the prime focus of equity research. The market is increasingly recognising that company-sponsored research is a viable source of additional information and particularly valuable for smaller companies looking to attract a wider range of institutional and retail investors. It is an invaluable, affordable solution for smaller companies aiming to increase investor understanding of their business, widen their investor base, promote liquidity and attract further investment.

The terms "independent research" and "alternative research" are used broadly interchangeably, to mean research that is not produced by a bank or broker, and is therefore less prone to influence from the desire to win additional business or subject to subsidy from other business areas. However, someone has to fund the costs of conducting the research, and when the funder is the company being researched, this form of independent research is termed "sponsored" or "company-paid" research. This form of research is open to criticism for a real or perceived lack of objectivity, which reduces its value to investors and hence to the companies themselves.

The equity research service provided by Irideus.org builds upon the sponsored research model, by introducing additional important safeguards into the commercial and research process framework, following the concept of "intermediated research". Central here to the Irideus.org service are: the company has no choice in its allocation to a research provider; once matched with the research provider, the company is under a two year contract; and the fees paid to the research provider are not sufficiently material for the company to be able to exert any influence over the content or conclusions of the research report.

Furthermore the independent research firms that stand behind Irideus.org have no investment banking, brokerage or proprietary asset management operations in their business models; conduct no company-paid research outside of the Irideus.org service; deliver a standard template for analysis of every company so that all standard topics are covered; and avoid ratings and target prices in the reports, since these can risk becoming a focus of pressure exerted on the research provider by the subject company. Collectively, these measures enhance the value of the report to investors and consequently, to the company itself.

The providers are all long-established research firms with international businesses and reputations. They each bring to the initiative the scale and expertise to provide research coverage on any company in any industry or sector. This allows Irideus.org to operate the essential random allocation of a company to one research provider, reinforcing the objectivity of the research.
See 'The providers'

All firms conduct their research with internal staff only, following defined research processes. To achieve the widest possible global distribution of the research, Irideus.org reports are distributed across a number of leading international vendor networks - Bloomberg, Thomson Reuters, Capital IQ, Proquote, and FactSet.

The key characteristics of the firms, which made each particularly well suited for the initiative, are:

	All enjoy highly competitive operating costs and efficient processes
	All enjoy a high international standing in the independent research community
	All are of a size to conduct research across companies in any sector, an essential characteristic in order for the random allocation to function
	None are conflicted by investment banking, proprietary asset management, broking, or sponsored research conflicts of interest
	The research has been conducted / reviewed by firms regulated and authorised in the UK by the Financial Services Authority.

Measures built into Irideus.org to protect its objectivity include:

Companies signing up to the service are automatically allocated to a provider by a mechanism embedded in the Irideus.org website, preventing a reliance on a sales relationship to win business. Once allocated, companies are signed up to a 2 year contract which reduces scope for research content to be influenced by a desire to generate repeat business. A team of analysts, rather than just one, works on each company - at least some of this team are physically located remotely and are not known to the company. This means that the research is protected from direct influence. The price point is intended to mean that the loss of any client company would not be material to the research provider, so their focus is on good customer service and quality and objective research rather than repeat business generation.

Conflicted research is of only limited value to investors and, as a consequence, questionable value to companies. Research that merely mimics the view of management will also quickly distinguish itself to be of little value to the investment community. Irideus.org is designed to deliver objective, comprehensive forward-looking research to investors.

The research providers have developed business models with low cost bases. They have collaborated closely to design and implement standardised research processes based on industry best practice in order to create uniform research reports across sectors. Research processes are conducted onshore where appropriate, but offshore where possible and where significantly lower costs are engaged. The providers are therefore able to make use of production, marketing and sales economies of scale.

Once a company registers for the service, completes the contractual process and payment remittance, the provider will commence the research process working closely with the company's management and conducting in-depth analysis of publicly available information. We will endeavour to publish an initiation report within 90 days of the contract completion.

This depends upon your reporting schedule - most companies will receive an initiation / annual report, with an interim report following half year results. There may also be update notes published on significant news.

No, the research reports do not negate the need for companies to fulfil their regulatory obligations in disclosing non-public information. Company directors will be asked to review a late draft of the research report, for factual accuracy and to confirm that the report contains no information that is not publicly available. In the event that the draft report does contain non-public information, a company will need to take appropriate steps prior to publication of the report in order to meet their regulatory obligations.

Company directors will be asked to review a late draft of the research report, for factual accuracy, but may not influence any assessment or conclusion contained in the report.

No. The report will contain a thorough analysis of the company and its business, but will not provide investment recommendations.

Yes. Estimates are an essential element of the research because investors are typically forward-looking and find an independent analyst's assessment to be helpful; the existence of a "consensus" estimate can substantially enhance the visibility of the subject company through the key distribution networks.

Should a company de-list from any of the markets of the London Stock Exchange during the first year, the liability under contract for the second year will be extinguished if you so wish. However a company that delists can continue to have coverage under Irideus.org for the remainder of the contractual term, as this is often essential for private fundraising or M&A activities.

A company will not be able to influence any assessment or conclusion contained in the report. This is the role of the analyst, and it is in the nature of independent research that any such views may differ from the company. These may be expressed, for example, in the "key risks" section of the report. Each report is authored by a sector specialist; then reviewed by his or her manager, the Director of Research, and finally by an experienced editor. The report provides the benefit of their collective knowledge, expertise and insight. The function of this research is designed as an objective assessment and investors are then able to take an informed view of the possible risks and rewards before reaching their own conclusions based on this and other information available.

This is not a requirement, but a company may invite their comment. Irideus.org research will not be influenced by any input that does not relate to factual accuracy of the research report.

Company/site visits within the domestic market are included in the fee. For company/site visits outside the domestic market, the provider and client will agree in advance the approximate budget for the analyst visit (transport and hotel costs only).