Lindsell Train has confirmed that it will be absorbing external research costs next year as it states it supports the objectives of Mifid II in improving transparency.
In a note attached to its latest monthly update on the Japanese Equity fund, the boutique asset manager says it does not rely on sell-side research for investment decisions, but sometimes find third-party research helpful for understanding a particular sector or industry.
The note says: “We are sympathetic to the objectives of Mifid II in seeking to improve transparency and value for underlying investors. Having conducted meetings with our major counter parties over the last few months, we are pleased to confirm that from next year we will be covering the costs of external research ourselves.”
It assures investors that it will maintain equivalent access to the research by budgeting for the cost appropriately, while also monitoring dealing costs in line with best execution obligations.
The Lindsell Train Investment Trust, which is invested in Lindsell Train, has previously warned that Mifid II compliance could impose significant extra costs on the business.
Founder Nick Train, who manages the investment trust, has previously backed the profitability of fund managers in the face of regulatory pressure and holds stakes in Rathbones, Schroders and Hargreaves Lansdown.