Effective 3 January, 2018, First Eagle Investment Management will absorb the costs of all external research purchased by First Eagle investment teams.
Industry practices regarding payments for external research are evolving due to the Markets in Financial Instruments Directive II (MiFID II), an EU directive requiring the unbundling of external research costs from trade execution costs. As a result, asset managers worldwide have been considering whether to pass the costs of external research to their clients or to pay them from their own resources.
“While our firm is not subject to MiFID II, we believe that this part of the directive points the way forward for our industry,” says Mehdi Mahmud, President and Chief Executive Officer of First Eagle Investment Management. “To be equitable and consistent across our entire client base, we have decided to use our own resources to absorb the costs of external research purchased by First Eagle investment teams for all our clients worldwide.”
Matt McLennan, Portfolio Manager and Head of the Global Value Team, adds: “As active, fundamental investors, we rely above all on proprietary in-house research, but on a selective basis, we use external research to help supplement our thinking. The quality of our portfolio management decisions depends on the depth of our analysis, and we will continue to invest in internal and external research for the benefit of our clients’ portfolios.”
