Regional Banks Dominate Small Cap Research

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Robert W. Baird, Piper Jaffray, and William Blair top Integrity Research's latest survey

Regional investment banks are the top providers of equity research on small capitalization stocks in the U.S., according to Integrity Research Associates, a specialist research firm covering the investment research industry.

In the latest edition of Integrity ResearchFocus® reports which review key segments of the investment research industry, Integrity identified the top US small cap research providers based on a survey of investors using small cap research. Based on the results of a survey conducted in the fourth quarter of 2009 of 141 buy-side investors, Integrity identified the best small cap research in each of eight industry sectors, and overall. The three most highly valued firms in the survey were Robert W. Baird & Co., Piper Jaffray, and William Blair & Co., which received Integrity’s 2010 Overall Top Picks for US Small Cap Research designation.

“Small cap investors look for seasoned analysts who know their companies inside out and have expertise in their sector. They particularly appreciate in-depth research reports and unique company or industry insights,” said Michael Mayhew, Integrity’s chairman and author of the study.

Regional investment banks benefited at the expense of large investment banks during the recent financial crisis, as investors diversified their counterparty risk, directing more commission flow to regional banks and agency brokers. Regional banks used the opportunity to upgrade and expand research staff, which has benefited small cap research. "Regional banks have historically been investors' favorite source of small cap research, and this has only gotten stronger in the last couple of years," added Mayhew.

A key part of Integrity's analysis was determining the attributes of small cap research which investors value most highly. Some capabilities which are critical to investors of large capitalization stocks, such as access to company management, are less important to small cap investors.

Demand for small cap research has been stable to increasing, according to Integrity's survey. One reason for this is investment performance. The S&P 500 has gained approximately 60% percent since market lows in March of 2009 whereas the Russell 2000 is up almost 90%.    

The 150-page Integrity ResearchFocus® report includes an overview of small cap equity research, reports on forty-six firms providing small cap research, an analysis of the top providers of US small cap research including the leaders in each of eight industry sectors, and Integrity’s Top Picks for US Small Cap Research. The report is used as a “buyers guide” for investment professionals and other users of small cap research. For additional information, go to or contact Jim Kempski at 646.786.6865.

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 3,000 research firms in the U.S., Europe and Asia. Additional information about Integrity can be found at


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