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May 20, 2005

How US equity research is parcelled out to India

Stephen Castellano has a post on which elements of US equity research can be outsourced to India:
While I do not think every function within equity research can be outsourced, I believe there are many areas that can. Currently in an analyst’s typical 12-hour work day, there are plenty of “back-office” functions that are left unfinished. If a senior analyst can trade at least one associate for six outsourced staff to cover non-time sensitive and “industry agnostic” work, I think he would gladly do so.

If I were a senior analyst with a staff of four associates, I would replace two of them with 12 dedicated outsourced staff (on an attrition basis, of course). The first thing I would ask my outsourced staff would be to audit my Excel models and think of ways to improve them.

Other tasks I would have them do would all be related to providing background research material like a specialized news clipping service – from creating spreadsheet models and databases, to simply taking and indexing notes on the vast number of conference calls, online presentations, press releases and media reports that concern my industry. If breaking news occurred on a weekend or late at night, it would be nice to know I have 12 associates ready to jump on any instructions to draft a morning note or report.
From what I understand, the folks at OfficeTiger and Irevna have been doing such work for a few years now out of good old Madrad (aka Chennai).

Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.