Unicorn Asset Management, the independent fund management business specialising in UK small and mid-cap investment, and AIM, has said that it will absorb the cost of external research once the new MIFID II regulations come into force in January 2018.
Director and Senior Fund Manager Chris Hutchinson said: “As an independently-owned fund management business, focused on the smaller end of the UK equity market, we have always understood the value of high quality research. Over the years, Unicorn has developed a reputation for delivering strong and consistent outperformance in an increasingly specialised area of the UK equity market. As traditional, bottom-up, stock pickers we adopt a high conviction approach to managing our Funds and seek to partner with investee companies over the long term.
“In order to do this successfully, it is vitally important that we get to know and understand businesses and their management teams as thoroughly as possible before making an investment decision. We have therefore deliberately chosen to continue investing in our internal research capability and have never relied on external research; either for ideas generation, or as a means of reaching investment decisions.
“Having said that, we certainly recognise and value high quality research. In particular, we tend to find that externally generated research is most useful when used as a cross-check against our own assumptions at the end of the stock selection process.
“We are therefore happy to pay for external research in future, thereby removing this additional burden of cost from the investors in our Funds. We will aim to partner with those firms who share our long term approach to investment, and who are capable of producing consistently high quality research at a sensible price.”