Little Square Capital

Little Square Capital

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Equity Research Services

We're determined to make your business successful in securing access to investors, crafting your success narrative, and positioning you for strategic capital raising.

What is company-sponsored equity research

Issuer-commissioned, also known as sponsored equity research, involves third-party research firms commissioned by a company (‘issuer’) to analyse and produce reports. This type of research, by its nature, cannot be considered independent. However, while direct funding from the issuer is a significant factor, it’s not the sole determinant of independence and many firms derive (or seek to) other revenue from the issuer, in the forms of corporate broking, investor relations, events participation, or even consulting services. Issuer sponsored equity research evolved as a response to limitations in the traditional brokerage model.

The challenge of declining equity research coverage

In the traditional brokerage model, research efforts favour large-cap companies due to their business potential and the promise of higher trading commissions. As trading commission rates began to decline, brokerage firms shifted their focus towards asset managers with high portfolio turnover rates, prioritising revenue generation. Unfortunately, this emphasis on profitability often led to a neglect of comprehensive research coverage for smaller companies or less-liquid shares with limited free-float, such as family-owned or tightly held shares.

The influence of hedge funds, known for their focus on short-term trading and liquidity, further shaped brokerage research agendas. This emphasis on covering larger capitalisation, more liquid companies was exacerbated by the growing popularity of passive investing and benchmarking to market cap-weighted indices. As a result, challenges in accessing vital research intensified, leaving smaller firms marginalised by mainstream brokerage houses.

The failed attempt to increase equity research coverage

Recognising the need for change, the European financial services industry proposed separating research costs from trading commissions. This aimed to break the links between commissions and research expenditure and establish a market price to fund equity research. The MiFID II delegated act was hailed as a potential game-changer, aiming to address longstanding disparities and improve research accessibility for smaller entities.

Anticipations were high that declines in sell-side research would be counterbalanced by the establishment of a market price for equity research. However, these hopes were dashed by shifts in asset management budgets towards supporting in-house research. Additionally, global investment banks, capable of cross-subsidising their services, offered research access at exceptionally low prices, further complicating the prospect of increased research accessibility.

What are independent equity research firms

Independent equity research firms are entities or organisations that specialise in conducting research and analysis on publicly traded companies, particularly focusing on their financial performance, industry trends, and investment prospects. These firms play a crucial role in the investment ecosystem by providing alternative sources of information and analysis, complementing the research offerings of traditional brokerage houses and investment banks.

Independent Providers can provide Equity-, Credit-, or Macroeconomic Research and even Alternative Data. In context of MiFID, equity research providers that act independently of investment banks or brokerage houses are not independent if they provide issuer-sponsored equity research.

Why do we need equity research for corporates​?

Equity research is indispensable for corporates as it influences market perception, enhances investor relations, and boosts visibility. By providing comprehensive analyses and forecasts, it helps companies communicate effectively with investors, building trust and credibility. Regular research coverage increases a company’s visibility, attracting potential investors and enhancing stock liquidity.

Moreover, research reports offer valuable insights for strategic decision-making, including capital allocation and expansion plans. Additionally, equity research allows companies to benchmark their performance against industry peers, identifying areas of improvement. Overall, equity research is vital for corporates to navigate financial markets, attract investment, and drive long-term growth.

Challenges Without Equity Research

Equity Research Challenges

Benefits from Sponsored Equity Research

Conflicts of interest

Both issuer-commissioned and freely offered investment banking equity research comes with the unavoidable risk of conflict of interest. Providers of both these business models risk potential future businesses if routinely speaking critically of companies.

So, when considering an equity research offering, explore the firm or their analyst credibility and standing within the investment community, and their recent body of research to determine whether their equity research will be intellectually balanced.

While conflicts of interest can be managed, smaller-cap or single-sector companies often struggle to attract attention from traditional, free research providers.due to their size. Issuer-sponsored equity research provides a solution, offering coverage for under-followed companies and enhancing their visibility and credibility. In response to the cost of compliance, Independent equity research firms, aligning with MiFID regulations, have moved away from specific target prices or investment recommendations, reducing the pressure on positive ratings and contributing to overall investment research quality.

Distribution of Equity Research Services

Issuer commissioned research can play a crucial role in expanding the availability of content. The rise of research distribution service platforms offer the opportunity for comparable distribution to global investment banks. Content produced under the issuer-pays model is made widely accessible, including to investors who are not clients of the independent research firm. This helps in promoting transparency and providing valuable information to a broader audience.

Little Square Capital - Empowering underserved companies

In contrast to traditional equity research conducted by investment banks and brokerage firms, small equity research firms like Little Square Capital‘s (LSC) focus is on small and medium-sized companies that often lack coverage from sell-side analysts. We specialise in providing these companies exposure to the global investment community, aiding them in achieving fair valuations.

Our sponsored research is readily available to professional investors, offering objective insights and prospective equity opinions. With a blend of global perspectives and local market expertise, LSC enhances market perception, instills investor trust, and provides invaluable insights, ultimately benefiting smaller and mid-sized listed companies. While our primary coverage market is the UK, we also extend our reach to select companies in other regions.

Empowering informed decisions​

Objective commissioned equity research is an invaluable asset for companies of all sizes.  Little Square Capital is here to support companies that seek differentiated investor profiles, and provide those insights that position your company for increased institutional investor visibility.

Little Square Capital offers tailored solutions that directly address key challenges faced by companies. Ranging from detailed research reports to personalised corporate access, our solutions seek to enhance your market standing, foster investor confidence, and effectively communicate your value proposition.

We leverage dynamic delivery platforms to ensure our equity research reports are distributed to both our differentiated network, and widely accessible across popular equity research distribution platforms.

What is our Equity Research solutions?

Little Square Capital understands your challenges! Our equity research services are bespoke to every client’s needs. LSC provides high-quality equity research delivered with circumspection and critical analysis, to help attract a more informed audience of investors, potentially increasing liquidity and interest in your company’s securities.

Issuer-Sponsored Equity Research

Typically our issuer-commissioned equity research service includes;

  • a comprehensive (20-30 page) initiation research report, followed by annual update reports that capture any material changes and strategic developments to aid investors in grasping the company’s business outlook and delving into the principles, strategy, and process that underpin your approach.
  • quarterly results and events reports within the year.

This can be complemented by our differentiated corporate access solutions.

Why Choose Little Square Capital?

Our team of have a track record of providing high-quality equity research on shares active in unique sectors, and are focused on conducting comprehensive and inclusive research with integrity and objectivity. LSC, along with our support partners, furnish objective research and rational recommendations. We aim to supporting your company’s stakeholder goals and financial objectives while considering long-term risk and returns for investors.

  • Increased confidence in investment decisions based on sound financial analysis and due diligence
  • Improved understanding of industry trends and company comparative advantage
  • Better risk management through comprehensive analysis of potential risks associated with specific investments
  • Possible improved investment returns through informed investment decisions.
  • Increased visibility and enhanced credibility, helping to inform new investors with in-depth insights and build an objective reputation
  • Improved relationships with investors, as research helps to build trust through independent and transparent updates on financial performance and prospects
  • Improved decision-making through access to objective, expert analysis of a company’s competitors
  • Quality research highlights the company’s value proposition, contributing to a more accurate market valuation.
  • Increased transparency and credibility in the companies operating within financial markets
  • Improved market efficiency through more informed investment decisions
  • Better allocation of capital to high-performing and away from under-performing companies
  • Increased information on lesser-known and under-covered small and mid-sized companies.

Independent objective equity research is valuable for companies of all sizes.

Equity research can provide valuable insights into the financial performance of companies of all sizes and stages of development, allowing investors to better understand the factors that impact the company’s value. Companies with equity research coverage are often viewed as more attractive investments, leading to fairer valuations and more equitable investment terms.

Here are some steps discerning CFO sor Investor Relations Officers of smaller companies can take when considering independent or investment banking equity research services:

  • Consider the quality, relevance, and usefulness of product often produced by a junior analyst to “cut their teeth”.
  • Compare the offerings, pricing structures, and terms of alternative providers to base your decisions on the broader market landscape.
  • Seek clarity on pricing, commitments, and any potential flexibility in the arrangement with alternative investment research providers.
  • Inquire about customisation options that align with your specific needs.

Our Commitment

Our contracted and issuer-paid equity research services offer an unwavering commitment to integrity, in-depth analysis, and objectivity. Our team’s dedication to thorough analysis means clients receive comprehensive reports that go beyond the surface, providing a critical understanding of the market landscape. Clients can trust in the credibility of our research, making us the ideal partner for those seeking unparalleled depth in equity analysis.

What happens after you choose Little Square Capital?

Data Collection and Analysis

Gather financial and market data. Analyse data to identify key trends. Evaluate financials.

Report Writing and Communication

Synthesise findings. Write a comprehensive research report. Communicate to clients and stakeholders.

Data Collection and Analysis

Gather financial and market data. Analyse data to identify key trends. Evaluate financials.

Report Writing and Communication

Synthesise findings. Write a comprehensive research report. Communicate to clients and stakeholders.

Vision of the Future of Investment Research

We believe investors and companies are in an alliance. This partnership should incentivise and implement strategic plans that drive appropriate capital allocation according to a set of clear rules that are determined by all stakeholders, including NGOs, institutional investors and Local Communities.

Equity research can help shape the allocation of capital to companies, ensuring that companies are aligned with key stakeholder demands for an improved impact on society and the environment, in awareness of standards and expectations of policies and regulations, and by encouraging companies to align their incentives with the broader interests of all stakeholders.

To measure whether companies could deliver sustainable long term returns we use a range of advanced inputs.

  • Artificial Intelligence and Machine Learning to automate data collection and the delivery of more accurate and comprehensive research results.
  • Focus on Inclusive Sustainability and ESG Factors to incorporate bespoke sustainable investing analysis into the research process.
  • Alternative Data Sources: increasingly use satellite imagery, social media, and alternative news sources.
  • Broader scope of analysis to consider the impact of emerging technologies, geopolitical risks, and the changing regulatory landscape.
  • Increased collaboration with stakeholders to gain a deeper understanding of the challenges and opportunities companies face.
  • Emphasis on real-world impact to evaluate financial performance and the social and environmental impact of operations and company actions.

Commissioned Research

Sponsored equity research involves a third party, such as Little Square Capital, conducting research on a particular company or industry and offering the findings to investors.

Sponsored equity research refers to a model where a third-party, typically an independent research firm like Little Square Capital, is engaged and compensated by a company or other entity to conduct research and analysis on specific stocks or industries. 

The management of Little Square Capital are particularly experienced in the analysis of technically complicated and advanced industries and companies, having covered advanced energy, chemical, and industrial technologies for more than two decades, and also have strong experience in considering larger private players and their impact on the comparative advantage of companies and industries.

We differentiate ourselves from other issuer-paid research companies through our commitment to in-depth analysis and unbiased insights. We tend not to think in 1-hour cycles, but rather focus on factors that could materially shift the investment case positively or negatively over the long term (the next couple of decades), increasing the quality and shelf-life of our research.

We seek to build our reputation by generating objective, insightful, financially rigorous, readable and timely research. We back negative findings with concrete evidence and data, using verifiable information to strengthen the credibility of reports.

If a client fails to adequately demonstrate an alternative perspective or objects to our honestly held opinions, we part ways while providing them with the opportunity to present their case or respond to the negative findings.

When conducting sponsored research on smaller or private companies, our key strategies include thorough industry and market analysis, interviews and outreach to stakeholders, comparative analysis with peers, financial modelling, risk assessment, thematic analysis, ecosystem evaluation, and scenario analysis. These approaches aim to deliver comprehensive insights into the company’s performance, risks, and growth potential.

We address conflicts of interest in sponsored equity research through upfront transparency, strict ethical guidelines, independence from external pressures, robust internal reviews, and adherence to a comprehensive code of conduct. 

Additionally, our move away from specific target prices or recommendations under MiFID focuses on delivering high-quality insights, reducing pressure on ratings, and adapting to regulatory requirements while maintaining a client-centric approach.

As a non-broker, we are not bound by MiFID II restrictions. Consequently, our research is openly accessible to all global investors, and we have the flexibility to facilitate introductions to any interested parties.

 Each client is different and we offer an entirely bespoke service. Please contact us and discuss your requirements. The value we deliver will be many multiples of our fees.

Bespoke Research

Contracted Equity Research, or bespoke equity research, is a specialised service provided in response to requests by investment funds. In this model, we conduct in-depth analyses of publicly listed companies, generating exclusive research reports and presentations tailored to the specific needs of our client funds.

These proprietary reports offer clients valuable insights for making informed investment decisions and navigating industry trends.

Little Square Capital’s bespoke research places a strong emphasis on customised analyses, providing investment funds with comprehensive perspectives that align with their strategic goals and engagement strategies.

The typical timeframe for the completion of a project varies based on the familiarity with the sector:

  • For sectors within our expertise, the project is usually finalised within 6-8 weeks from the date of the final contract.
  • In the case of new or highly specialised companies with complex sectors, the timeframe extends to 14-18 weeks until the delivery of the final research product.

This timeframe encompasses the process of gathering and analyzing information following the agreement on terms and the scope of the analysis.

All our bespoke research are commissioned by specific investment funds, and therefore …

We collaborate closely with clients to meticulously articulate desired outcomes, aiming to elevate client satisfaction, and maintain excellence in delivering comprehensive, credible, and succinct equity research

Clarity is paramount, and we emphasize the need for sponsors to precisely outline the project’s scope and requirements right from the project’s initiation. We advocate for an interactive approach, encouraging active involvement from a specific sponsoring analyst throughout the entire process. This ensures ongoing alignment and guarantees that investors receive the precise insights and information they seek.

Our commissioned research reports are not available to the public, except for one circumstance: if the client who initiated the research requests the report to be made public after a designated period, we may opt to release it at our discretion.

Beyond enhancing comprehension of companies and industries and understanding factors influencing investment decisions, sponsors may also seek thought-stimulating ideas and identification of issues that can spur further engagement. 

Bespoke research findings will be presented in a predefined format, either as written reports, or presentations, and can be supplemented with interactive sessions.


In conclusion, at Little Square Capital, we don’t just provide equity research reports; we provide a comprehensive service to empower your journey. Our commitment to unbiased, comprehensive analysis is the cornerstone of your success.

Our team is poised to elevate your profile, improve investors’ understanding, disclose how you mitigate risks, and drive perceptions. Schedule a consultation today and embark on a journey where every decision is backed by expert analysis.

Additional Reading:

CFA Institute and National Investor Relations Institute (NIRI):
Best practice guidelines: CFA Institute and the National Investor Relations Institute (NIRI) convened a joint task force to develop best practice guidelines governing the relationship between analysts and corporate issuers to ensure the existence of good channels of communication.
Best Practice Guidelines Governing Analyst/Corporate Issuer Relations

Rules and guidance: FINRA reminded member firms of the need for heightened supervision over solicitation and research activities in circumstances where an issuer has communicated an expectation of favourable research as a condition of participating in an offering.
Guidance on Prohibition Against Offering Favorable Research to Induce Investment Banking Business

Small-Cap Institute
Opinion piece: Amid reduced sell-side research for small companies, the small-cap institute highlights the risk of the pre-MiFID model, and believed the choice to pay for independent research demanded careful evaluation. The small-cap institute believe companies should assess unpaid research possibilities, scrutinise analyst expertise, and consider potential conflicts of interest.
Issuer-paid equity research, should you or shouldn’t you?

The UK’s Investment Research Review (IRR)
In 2023, the UK chancellor launched  an independent review of financial services investment research and its contribution to UK capital markets competitiveness. The report called for several changes to support research coverage of smaller cap companies, especially in specialist sectors that lack larger comparators, in a desire to promote more investment in those companies.
UK Investment Research Review (PDF)

Little Square Capital Disclaimer

Please refer to our glossary for more detailed definitions of our data points.

This document is proprietary to Little Square Capital (LSC). It may not be copied, distributed, published, or disclosed without LSC’s explicit consent. LSC and its affiliates make no representation or warranty, express or implied, as to the accuracy or completeness of the information herein. Views expressed are not necessarily those of LSC. This document does not constitute financial, legal, or tax advice. Little Square Capital is authorised and regulated by the Financial Conduct Authority (FCA). The information provided is for general informational purposes only and does not constitute investment advice. Investing involves risks. LSC does not guarantee the accuracy or reliability of any information presented herein. Investors should seek professional advice before making any investment decisions.

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