Audio – “God Bless Eliot Spitzer”
New York Attorney General Eliot Spitzer’s crackdown on the way Wall Street produces stock research has given an advantage to investors who can fund their own research, said Jim Davidson, a co-founder and managing director of private equity firm Silver Lake Partners. He told the Reuters Venture Capital Summit that there is less quality research publicly available in the markets because the investment banks can’t fund it from banking income anymore, and trading commissions aren’t enough to bridge the gap. “You have less money to pay researchers so you get less talented people but they also give them less money to do research,” he said. That loss of information means that markets are less efficient, creating opportunities for private equity firms, he said. “God Bless Eliot Spitzer and this new framework because for people like Silver Lake we do our own research,” Davidson commented.