How the Offshore Equity Research Support Model Changed — and Why

Insight article

This is an insight article.
It examines why the offshore equity research support model has changed — and what now determines whether offshore analysts add real value to onshore equity research teams.
It assumes familiarity with offshore equity research support models. If you are looking for a practical overview of how offshore analysts support equity research teams today, see: Equity Research Support.

Why the model changed

The offshore equity research support model did not change suddenly, nor for a single reason. It changed because a set of structural pressures, building over more than a decade, steadily removed the conditions that made earlier models effective — and exposed their limits.

1. MiFID II permanently altered onshore equity research teams

MiFID II is often described as “old news”. Operationally, its effects are ongoing.

By separating research payments from trading commissions, MiFID II reduced budgets across sell-side equity research. That led to:

Smaller onshore equity research teams
Thinner sector coverage
Less redundancy within coverage groups

Before MiFID II, onshore teams could absorb friction in offshore equity research support — reworking outputs, rechecking models, or acting as translators between teams.

After MiFID II, most cannot. As a result, offshore analysts supporting equity research needed to contribute work that was immediately usable, not merely accurate.

2. Early offshore equity research support worked — within limits

The first generation of offshore equity research support focused on clearly bounded analytical tasks:

Financial model maintenance
Data updates and checks
Standardised valuation work
Earnings roll-forwards

These tasks were well suited to offshore analysts because:

Inputs were defined
Outputs were verifiable
Judgement remained primarily onshore

For many years, this model worked.

However, as onshore equity research teams became leaner, the proportion of work requiring judgement increased — even within tasks that appeared mechanical.

Offshore support models that remained focused on execution alone increasingly created friction rather than leverage.

3. AI is accelerating an existing shift

AI did not cause the offshore equity research support model to change. It accelerated a change already underway.

As automation improved around data handling, formatting, and basic modelling, the remaining value in human analysts shifted toward:

Interpretation rather than production
Anticipating how outputs would be used by onshore analysts
Adjusting work to house style, coverage priorities, and client context

This applied equally to offshore analysts.

Support models built around task completion without integration were squeezed from both directions — by leaner onshore teams above them and automation below them.

What is replacing the earlier model

In response, offshore equity research support evolved in a specific and consistent direction.

Effective models today tend to share these characteristics:

Offshore analysts are integrated into onshore equity research teams, not treated as a separate delivery layer
Work ownership increasingly sits offshore, with onshore review — rather than offshore execution followed by onshore reconstruction
Offshore analysts understand the purpose of outputs, not just the mechanics
Communication between offshore analysts and onshore teams is frequent and iterative, not batch-based

The value of offshore equity research support now lies less in speed or cost alone, and more in usability.

Why this shift is difficult in practice

The change in model is conceptually simple but operationally demanding.

It requires offshore analysts who can:

Apply judgement within defined boundaries
Incorporate feedback quickly
Adapt outputs to the preferences of specific onshore analysts

It also requires onshore equity research teams willing to:

Invest time in integration
Treat offshore analysts as part of the analytical workflow
Delegate responsibility rather than isolated tasks

Where this mutual adjustment happens, offshore equity research support creates genuine leverage.
Where it does not, teams often conclude — inaccurately — that offshore support no longer works.

The practical implication

The offshore equity research support model did not fail. A particular version of it reached its limits.

What is replacing it is not more complex, but it is more demanding — of integration, judgement, and expectations on both sides.

Understanding this distinction is now essential when evaluating offshore analyst support within equity research teams.