London based independent economic and policy research firm, TS Lombard, recently hired Ken Wattret, formerly a top economist at BNP Paribas. The real question is whether this is just the beginning of a hiring spree for the UK-based firm.
New Hire at TS Lombard
Ken Wattret joined TS Lombard as Managing Director of Global Macro Research following a 16 year career at BNP Paribas. Most recently, Mr. Wattret was Co-Head of European and CEEMA research at BNP. Previously, Ken was Chief Eurozone Market Economist at BNP Paribas from 2000 to 2012, and a Senior European Economist at Paribas Capital Markets from 1996 to 2000. Prior to his stint at BNP, Wattret spent over 3 years at HSBC as a UK and International Economist.
Ken Wattret left BNP Paribas last year after the bank announced plans to cut 233 jobs in its London-based corporate banking and securitization departments. Wattret was one of BNP’s investment bank staffers whose jobs were at risk of being eliminated.
TS Lombard was created out of the merger last August between two independent research shops — Lombard Street Research and Trusted Sources. Headquartered in London with offices in Beijing, New York and Hong Kong, TS Lombard employs more than 26 economists and analysts, as well as a team of 20 sales and marketing professionals. The firm’s research coverage includes the US, China, Eurozone, the UK, Japan, South Korea and Australia as well as India, Brazil, Mexico, Russia, Turkey, South Africa, the Middle East, and South East Asia.
The addition of Ken Wattret is TS Lombard’s second major addition to the management team since the merger last year (Chris Deavin joined as Global Head of Sales in January, 2017). While it is still too early to say whether the firm is embarking on a hiring spree, we do think it is a possibility.
Ultimately, we suspect this is likely due to the pending regulatory trends. A number of independent research firms we have spoken with believe they will benefit from the level playing field that should result from the unbundling of equity research from commission payments mandated under new MiFID II regulations.
In addition, the supply of analysts looking for work has increased over the past year as many investment banks in Europe and the US have shed analysts. This is due, in large part, to the fact that asset managers will be forced to justify what they pay banks for their research once MiFID II goes into effect. Consequently, independent research firms like TS Lombard have been able to attract high quality talent like Ken Wattret looking for jobs with a better work/life balance.
TS Lombard may also feel this is the right time to expand their research teams because they expect that independent macro and policy research firms will be well suited to compete with investment banks once unbundling has taken place. Historically, most investment banks did not invested heavily in macro and policy research because it was hard to get paid for this work, whereas some independent research firms focused on this space. This could mean that these independent research firms will fare well when the buy-side is forced to value their services against those provided by the large investment banks.
We will have to wait and see whether our analysis of the bullish trends facing TS Lombard and some of the other independent macro / policy research firms will lead these firms to ramp up their hiring plans.