Nomura in Joint Venture Discussions With  Wolfe Research

Nomura in Joint Venture Discussions With  Wolfe Research

(Bloomberg) -- Nomura Holdings Inc.’s U.S. arm is in talks to enter a joint venture with Ed Wolfe’s Wolfe Research LLC, according to people with knowledge of the matter.

The structure of the partnership, which may be named Wolfe Nomura, hasn’t been finalized, and could feature a revenue-sharing agreement and a subscription fee, said one of the people, who asked not to be identified because the talks are private.

Kenji Yamashita, a Tokyo-based spokesman for Nomura, and a representative for Wolfe declined to comment.

The talks come as a growing number of firms either exit equities research or shrink as commission fees dwindle and Europe’s MiFID II market rules force brokerages to separate charges for research from trading.

Last year, Australia’s Macquarie Group Ltd. cut equity research and sales jobs in New York and London, and signed an agreement with Paris-based Kepler Cheuvreux to distribute each others’ research. Kepler itself has regional distribution agreements with Piper Sandler Cos. and Canadian Imperial Bank of Commerce.

New York-based Wolfe Research, which specializes in equities research, sales, trading and capital markets, was founded in 2008. The firm and its affiliates employed about 180 full-time professionals with representatives in cities including Boston, San Francisco, Los Angeles and Chicago, it said in a March statement.

Wolfe, named after its founder, a longtime Bear Stearns transportation analyst, has increased its cash equities revenue at a compound annual growth rate of about 30% over the past dozen years despite dwindling industrywide commissions, according to a person familiar with the matter. The firm encourages its analysts to be ranked highly by clients, in part through its incentive structure.

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