⦿ Executive Snapshot

• What: Substantive Research launches a new data-driven analyst ranking system to meet the evolving needs of asset managers in an AI-driven landscape.
• Who: Substantive Research, large asset managers, brokers, Mike Carrodus (CEO).
• Why it matters: The initiative addresses changes in research consumption and prioritization of analyst roles as AI transforms the investment research space.

⦿ Key Developments

• 70% of large asset managers believe AI-generated “maintenance” coverage will become a baseline, making direct access to top analysts more valuable.
• 80% of asset managers with AUM above $150bn expect only slight increases in research budgets over the next two years, with a focus on differentiated, tenured analysts.
• 736 mid-tier analysts left the market between 2023 and 2026, leading to a leaner sell side structure prioritizing senior analysts and their junior support teams.

⦿ Strategic Context

• The shift towards AI-generated research indicates a fundamental change in how investment research is created and consumed, reshaping the landscape for asset managers and brokers.
• The exit of mid-tier analysts reflects broader trends in the asset management industry, emphasizing the importance of senior analysts and changing team structures.

⦿ Strategic Implications

• The new ranking system may influence how asset managers allocate their research budgets, potentially leading to increased demand for senior analysts in the future.
• Over time, the commoditization of maintenance research could alter competitive dynamics within the investment research market, favoring firms that adapt to AI integration.

⦿ Risks & Constraints

• Potential risk includes regulatory scrutiny on the use of AI in investment research and the implications for analyst roles within firms.
• The competitive landscape may pose challenges, especially if other firms develop similar or superior ranking methodologies.

⦿ Watchlist / Forward Signals

• The first set of analyst rankings is expected to be released to clients in November 2026, marking a significant milestone in the initiative.
• Future developments to watch include how asset managers adapt their research strategies in response to the new ranking system and AI advancements.