Through our written research work, we aim to cover every IPO and Placement in Asia Pacific (ex-Korea) with a deal size of at least US$100 million. On top of that, we work with a group of clients to assist them with selecting the right IPOs, whether by providing them with models/additional thoughts or keeping a look-out on certain sectors or geographies to aid their asset allocation.

For our ECM-focused clients, we also provide early thoughts at the time of launch of Placements, ECM (Equity Capital Markets)-related trade ideas, as well as upcoming deal and lock-up expiry pipeline. In addition, we provide a regular dialogue with the team.

We primarily have two sets of clients who use our bespoke research services: ECM-focused asset managers; and other asset managers looking for ECM opportunities to allocate capital into.

For ECM-focused clients, we complement their existing workflow in whatever way and form we can, whether by providing models, questions for management, trade ideas, early thoughts on Placements, or short write-ups.

For other asset managers, we understand their investment tilt/preference and keep them informed about prospective deal pipelines and highlight interesting opportunities. Once the IPO is live, we assist them in decision-making by providing valuation inputs and deal colour. In the past, we have aided a few clients who have gone on to take cornerstone/anchor stakes in IPOs.

We work with a combination of long/short and long-only hedge funds, along with long-only asset managers. We work with traders as well as PMs/Analysts. For traders, we provide our inputs on placements, lock-ups, trade ideas, and thoughts on IPOs. For PMs/Analysts, we focus on company fundamentals, valuations, and pre-positioning opportunities.

As far as we know, we were the first independent research firm to start looking at ECM transactions in Asia Pacific in 2015, and we are still the only independent research firm doing so. While there are a few independent analysts trying to cover the space, we have yet to come across any who offer our breadth and depth of service, with a hit rate of 73.8% out of 581 IPOs and 67.6% out of 752 placements, as of June 2021.

Unlike the tons of sell-side research that one gets on IPOs from the banks that are on the deal, we provide an independent view. We only get paid for the subscription revenue that we derive for our research from institutional clients and hence, we have no incentive to be positive or negative on an IPO apart from speaking our minds and making sure our hit rate stays high. In that sense, our incentives are aligned with investors and not with the company or the banks. In the past, we have rated 64% of IPOs as “Avoid”.

The only research that is widely available on IPOs is from the investment banks that are on the deal and they get paid only if the listing happens. Therefore, these are essentially company-sponsored research reports. On the other hand, other investment banks that aren’t on the deal don’t really write on IPOs, unless they are large listings, as they can’t generate trading commissions until the stock is listed. Thus, we are the only independent research firm that has consistently been covering Asia Pacific IPOs and Placements since 2015.

All of us in the team have followed different paths but we were on the sell-side as equity research analysts before we set up Aequitas Research. We have, in the past, worked on listings where we have been part of the bank analyst teams writing the not so “independent” equity research reports on companies that were looking to list or undertake a Placement. That made it easier for us to spot the gap in the market.

Smartkarma is a hub for independent research in Asia Pacific, and this makes it a natural home for us. We used to be a part of the Smartkarma internal team before we spun out into an independent firm in 2018. Therefore, Aequitas Research and Smartkarma have been instrumental in creating a hub for independent ECM research.