Research drives the bus.
But who’s in charge of the research? Or managing it?
That’s a job being looked at by Stamford, Connecticut-based Nucleus195, a new firm founded in part by Wall Street alum Doug Rivelli. In a recent meeting with Traders Magazine, Rivelli described the new firm as looking to bring order, efficiency and transparency to the research provision market in a post-MiFID II world.
“We want to bring radical change to the interaction between investment managers and research providers worldwide,” he began. “We’re looking to eliminate workflow gaps and inefficiencies and provide a vibrant ecosystem for the brightest content producers in developed, emerging, and frontier markets, and the investment professionals who consume it.”
The Nucleus195 platform provides access to global research coverage and exceptionally strong emerging and frontier market offerings. With on-the-ground alpha-generating research from major brokers, large independent houses, and research boutiques, Nucleus195 looks to provide the buy-side with what it desires the most – actionable alpha-generating ideas and insights that will help traders meet their client’s needs.
“I’d like to think of us as more than just a research aggregator – that is but one component,” Rivelli said. “We’re predicated on addressing all the problems surrounding research – from transparency, direct access to research and distribution. We focus on providing tools and analytics to maximize the value of research.”
Rivelli said Nucleus looks to serve both the buy-and sell-side traders – ranging from the small independents, global bulge bracket brokers, the middle market, RIAs, private equity funds, hedge funds and others.
“The entire research model is broken as there is less and less profit to be made delivering research,” Rivelli said. “We can provide a broad-based distribution platform that benefits everyone – a whole tool kit of products.”
For example, Nucleus195 users can use the Analyst Comments feature which makes it easy to post comments related to published content and coverage areas and tag them to relevant research reports. There is also a Trader Notes feature that enables traders at sell-side firms to add local insights and market commentary on companies, sectors or markets. The Research Request feature supports business development efforts by enabling research providers to view and respond to bespoke research requests that have been posted on the platform. Lastly, there is a Content Tagging feature that allows the tagging of reports with keywords and metadata to maximize exposure in searches.
“In phase 2 of our launch, we can help facilitate video and audio, online roadshows or conference calls,” Rivelli added. “The goal is to bring all the pieces together so everyone benefits. We handle all the payments, CSA, RPA, credit cards or invoice. And the best thing is that everyone interacts with us – a single counterparty - to deal with. Brokers do not have to rely on trading to get paid for research and providers know they are getting paid.”
“They can now set their budgets by person or firm used,” Rivelli continued. “They can share notes internally and better utilize their information - anything to generate alpha is at their fingertips.”
And Rivelli knows what the customer want as he is no stranger to trading. Rivelli has over 25 years’ experience in securities markets, having spent time on both the buy side and sell side as a global trader, portfolio manager, and financial technology executive. He was CEO of Pragma Financial and ATM Management, both leading firms in the algorithmic trading and dark pool space. He was also co-head of Auerbach Grayson’s U.S. Equity Sales and Trading desk.
Aside from Rivelli, Nucleus195 was also co-founded by Scott Duxbury, a 25 plus year veteran in trading and advising on global equities in Australia, Europe, and the U.S. He ran the Emerging European trading desk in New York for Merrill Lynch, was head trader in New York for Rencap, launched the U.S. trading desk for Berenberg Capital Markets and was a Managing Director for Auerbach Grayson.
The final co-founder is Mehdi Sunderji, a veteran with 20+ years of successful investment industry experience gained in London and New York. He spent the first part of his career in London, working for Instinet, Deutsche Bank and eventually becoming a founding partner of Execution Noble. In 2003, he left London to help open the US office for Execution Noble which was acquired in 2011 by Banco Espírito Santo. Subsequent to that he was a Partner at Atlantic Equities, Head of International Sales Trading at MKM Partners and a managing director for Auerbach Grayson.
Users of the Nucleus195 platform don’t pay to use the service but there is a charge for research of which Nucleus195 takes a percentage. There are additional fees for the aforementioned extra tools. The simplicity in billing to/from Nucleus195 helps traders and compliance officers more easily manage payment for research in compliance with MiFID II as well as manage soft-dollar protocols.
Rivelli told Traders Magazine that the firm plans to offer users 150 different content providers by end of year and continues to talk to others. He confirmed that Nucleus195 is in discussions with another 400 research providers globally. Lastly, the firm hopes to onboard 100 buy-side firms on the platform by the end of the year.
“Our model is to partner. And expand,” Rivelli said. “We’re talking to prime brokers and RIAs, people who need this information but historically haven’t had access to it.”