Research is a slog. Teams of analysts sit at their desks, fingers typing furiously, windows and tabs opening and closing. At least, in the pre-pandemic days, they had each other.

Though it’s still unclear how many will work remotely indefinitely by choice, firms are grappling with the possibility that they could be forced out of their offices again—perhaps by another pandemic wave, or through displacement due to climate change-related events, which are ramping up in frequency and intensity around the world. In addition to hardships these scenarios cause on a humanitarian level, they also throw a wrench into everyday processes like collaboration, data-sharing, and workflow efficiency.

Hodges Capital, an investment advisory firm based in Texas with more than $500 million in assets under management, enlisted the help of Sentieo, which provides a cloud-based research management system (RMS) for investment analysts and researchers. Eric Marshall, director of research and co-chief investment officer at Hodges, says overhauling its proprietary research department with Sentieo has proved “transformational” for the team of 11 he oversees.

Having had a proprietary research process in place prior to the pandemic, Hodges’ analysts published all of their research notes on an internal drive, which featured a “clumsy” interface to access, Marshall says. If a portfolio manager needed information quickly, it was often easier for them to find an analyst directly and ask their questions, rather than sift through the database.

And it didn’t offer the research team a way to aggregate sell-side research from other institutions, meaning they had to seek out individual reports online or query their email inboxes. When the firm went remote due to Covid-19—though staff have since returned to its Dallas office—those issues were compounded by reduced bandwidth and screen real estate, as the number of necessary daily calls rose.

Sentieo offered Hodges a way to pull data from industry journals, sell-side reports, internal research, and regulatory filings into a central hub that could be accessed and analyzed by multiple users at once, in the style of Google Drive.

“If I have an analyst in New York at the JP Morgan conference, for instance, and he has a one-on-one meeting with the CEO of a company talking about new products or services, he’s typing up those notes, and he’s publishing them in real time,” Marshall says. “And I’m sitting back here in Dallas, and I see [Hodges analyst] Chris just met with the CEO of this trucking company, and it looks like the recent price increase they took is actually something they’re feeling good about. It just allows information to be disseminated more effectively and efficiently across the entire investment team.”

Marshall adds that having a modern, efficient RMS adds an extra layer of accountability for team members, as well as a safety net if regulators or investors come knocking.

“If somebody came to me and said, ‘Why did you buy that stock?’ I can say, ‘Well, here’s our investment thesis.’ I don’t have to go into a filing cabinet and say, ‘Well, we had this manila folder with a stack of due diligence this big—you want me to scan it and send it to you?’” Marshall says.

More than an RMS

Though Sentieo is one of a handful of RMS providers—others include MackeyRMS, which recently merged with InsiderScore, as well as Nasdaq’s eVestment, FactSet RMS and SS&C’s Tamale RMS, to name a few—it views itself, to a certain extent, as a quasi-competitor of big data providers such as Bloomberg, FactSet, and S&P Global Capital IQ, says CEO David Lichtblau.

While institutional data providers offer critical functions like sell-side and exchange connectivity, news, and fundamentals, he says they don’t provide a place for analysts to perform their entire research workflows—which includes pulling numbers together, getting them into Excel, modeling, comparing similar companies, writing notes (usually in Microsoft Word), and finally emailing them to a portfolio manager and storing them in Dropbox or SharePoint—in one single application.

This is the crux of Sentieo’s RMS, but the company doesn’t directly collect fundamentals from companies. To fill the data gap, it began licensing market data from S&P Global, Refinitiv, and FactSet, and alternative data from Earnest Research.

“We are aspects of the [Bloomberg] Terminal. We’re not the next Bloomberg, but we are a platform to do the work. We’ve got market data, we have a built-in RMS, and then part of our secret sauce, if you will, is all the work we do around natural language processing,” Lichtblau says.

A function called Search has collected and structured 50 million text documents—including filings, annual reports, financial news releases, and every piece of broker research from Goldman Sachs and its peers—all of which Sentieo has indexed and applied financial linguistics to, in order to understand where, in long pieces of text, a speaker is giving guidance or identifying risk factors, without directly saying so.

Hodges’ Marshall says Search, in particular, has reduced his reliance on Bloomberg’s Terminal.

“If I’m looking at a company for the first time, I can do keyword searches and search through all of that company’s SEC (Securities and Exchange Commission) filings, their press releases, sell-side reports, internal notes, conference call transcripts—I can search through all that at once,” Marshall says. “And I may not have all of those sources aggregated in Bloomberg. We still have Bloomberg—I wouldn’t say Sentieo is a replacement for it—but there are functionalities that are just easier to do at Sentieo that we no longer use Bloomberg for.”

In February, fellow research management provider MackeyRMS merged with text data specialist InsiderScore, which tracks insider transactions, management changes, stock buybacks, and institutional holdings for publicly traded US companies, and which is also home to inFilings software for structuring and analyzing textual data such as SEC filings, earnings call transcripts, and other documents.

Andrew Robson, CEO at MackeyRMS and InsiderScore, says buy-side shops are demanding their RMS providers come with a data-enriched, enterprise-level offering, which was a key driver in the recent acquisition.

“Our plan is to build a single, information-rich environment where clients can query internal and external research content in one platform to find the most actionable insights and see unique trends across key corporate, financial, and regulatory datasets; insider and institutional sentiment data; market data; and most importantly the firm’s internal research content,” he says.

If that sounds reminiscent of Sentieo’s aims, the similarities go even further. In May, the company released version 2.0 of the Mackey platform, which features new natural language processing capabilities that provide users with automatically generated insights within their research database. Users can also manipulate datasets by relevance and proprietary metadata in real time across both their proprietary intellectual property in the RMS and external investment data sources.

“We call this third-generation RMS. With gen three, we’re moving from a system where clients meet to share and act on information to one that begins to alert the investment team to trends, insights, and correlations in their internal and external data that are relevant, timely, and actionable,” Robson says. “It’s a very exciting time to be focused on this space.”