Hedge Funds Use Channel Checkers For Primary Research

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Two-thirds of hedge funds with greater than $1.5 billion in assets perform channel checks, with over 45% using third party firms to assist the process. Specialized channel research firms serving hedge funds and other institutional investors have grown from four firms to over twenty during the last ten years, according to a study released by Integrity Research.

Two-thirds of hedge funds with greater than $1.5 billion in assets perform channel checks, with over 45% using third-party channel research firms to augment their investment research capabilities, according to a new study released by Integrity Research, a specialist research firm covering the investment research industry. Channel checking is the practice of examining upstream and downstream trends in a company's supply chain.

In its latest edition of Integrity ResearchFocusSM, which reviews key segments of the research industry, Integrity reviews twenty three channel checker firms, up from four firms ten years ago. "Prior to 2000, there were only a handful of firms focused on providing custom channel research services to the buy side," says Michael Mayhew, Integrity's chairman and co-author of the study. "Today, there are dozens of firms to choose from, each bringing different expertise and approaches."

Half of all respondents to the survey, including both hedge funds and long only investors, indicated they conduct channel checks as a regular part of their investment process, with 32% using third party firms offering channel checking services. The investor survey, conducted in the first quarter of 2008, included 140 respondents.

Third party channel checking firms apply variety of different market research techniques to analyze the supply chain. Recently, some expert network firms have diversified into the channel checking space, adding custom surveys to their core business of expert consultations. "While specialist channel checking firms used to be the primary providers of channel research, expert networks, sell-side brokers, KPOs and even industry consultancies are getting into the game," said William Greene, analyst and co-author on the report.

The 74-page Integrity ResearchFocusSM report provides a framework for choosing which channel checking firms are best suited for investors' specific research requirements. It provides evaluations of firms that supply channel checking services, an overview of the channel checking industry, growth forecasts for the channel checking industry, Integrity's "top picks" in the channel checking space, and company-specific information on the most unique and interesting channel checking firms in business today.

For additional information on the current edition Integrity ResearchFocusSM go to http://www.integrity-research.com/retailReport or contact Matthew Bannister at 212.845.9088 x804.

About Integrity Research
Integrity Research Associates, LLC is an information and solutions provider specializing in the investment research industry. Its institutional investor clients use Integrity's services to find new research providers and monitor existing ones. Integrity ResearchSelect® provides confidential, customized searches tailored to investors' requirements. Integrity covers over 1,700 research firms in the U.S., Europe and Asia. Additional information about Integrity can be found at http://www.integrity-research.com.

Integrity ResearchSelect is a registered trademark of Integrity Research Associates, LLC. Integrity ResearchFocus is a service mark of Integrity Research Associates, LLC.

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