Instinet, a U.S. agency-only brokerage hoping to fill a gap left by the diminishing number of sellside analysts, launched a dating-like service on Monday that allows companies to connect directly with institutional investors.
The unit of Nomura Holdings Inc said its Web-based platform, called Meet the Street, would particularly help North American small- and mid-cap companies meet buyside portfolio managers, eliminating the sellside middleman that may not always have their best interests in mind.
Like other so-called management access services recently launched, the platform could replace sellside analysts who have dwindled in recent years. Companies typically rely on the research of sellside brokerage firms to get their names out to buyside institutions such as mutual funds.
Instinet said analysts have at times favored their clients in setting the meet-and-greets, posing a conflict of interest.
The way that this process works around Wall Street is completely inefficient and loaded with legacy practices that have been going on for decades, said Michael Dolan, a Meet the Street co-president. We take out the middleman here, and remove any kind of issues like anonymity.
Instinet, which also runs trading venues, did not say how much the platform cost. Nor did it estimate revenues or detail its fees, the structure of which will vary among clients.
The move follows similar recent offerings by Liquidnet and by ConvergeEx Group, which partly aim to fill the niche left as sellside firms trimmed their staff of research analysts.
The analysts, hard hit by the government probe of the 2000-2001 crash of technology stocks, were again on the chopping block after the Wall Street crash of 2008-2009.
Instinet said it has more than 1,300 U.S. clients and expects hundreds of companies and institutions to take part in the platform, which it likened to a dating service.
With a dating service you've got two people who don't know one another and put in some information, said platform Co-President Dan Dykens. When the information overlaps, the technology brings the two together, and they decide if they want to go on a date. That's exactly what we're doing.
(Reporting by Jonathan Spicer, editing by Matthew Lewis)