All America Research: Battle of the Bulge


Institutional Investor’s All-America Research Team poll is castigated as a beauty contest, but it remains the most influential research survey for U.S. research providers.  This year’s survey is particularly interesting for what it tells us about how research providers are responding to the stresses of the current environment.  We see a handful of bulge bracket investment banks playing the game intensely while other bulge firms seem to be backing off.  In tomorrow’s post, we’ll look at the independent side of the equation.

The headline for the 2013 All-America Research Team is JP Morgan’s continued dominance of the poll.  JP Morgan vaulted to the #2 spot in 2008 after gaining Bear Stearns’ top ranked research team during the financial crisis.  JP Morgan surpassed Barclays (Lehman) in 2010 and has held the #1 spot since.  In the current poll, the number of JP Morgan’s ranked analysts grew from 43 to 47.  The question is whether JP Morgan will continue to invest in its research given its recent woes.

If not, Bank of America Merrill Lynch is poised to take over.  It came roaring back in the current poll, jumping from 34 ranked analysts last year to 41 this year, moving it from #3 to the #2 position.  As we reported this summer, BoA Merrill toppled UBS from its 12 year dominance of the Extel survey this year.  BoA Merrill also captured the highest commission share in latest Greenwich U.S. Equity survey.

Morgan Stanley was treading water in the latest survey, keeping the same number of ranked analysts in 2013 as the previous year.  Surprisingly this resulted in an increase in its ranking from #4 to #3, as Barclays flamed out of the #2 position, dropping from 39 ranked analysts to 31 analysts.  Barclays seems to be scaling back its commitment to the top rankings it inherited from Lehman.

Credit Suisse also seems to have reduced its research commitment, dropping from #6 to #9, as its ranked analysts dropped precipitously from 26 to 19.   CS’s fall helped its rival UBS keep its #8 position despite losing 3 ranked analysts during the year.  UBS recently hired Morgan Stanley’s research director and research COO, suggesting that it is trying to boost its research standing.

Goldman Sachs, which has never had a fervent commitment to research, stayed steady at the #11 spot with the same number of ranked analysts, and Jefferies is fading further with a decline in ranked analysts from 8 to 6.

RBC’s recent push into research was rewarded with an increase from 2 to 4 ranked analysts, moving it up from #16 to a multi-way tie for #13.

So for the bulge firms, we have 3 firms playing the research game very hard: JP Morgan, BoA Merrill, and Morgan Stanley (but will MS persevere with the recent loss of its US research management team?)  We have falling stars: Barclays and Credit Suisse which seem to be weakening their commitment to research.  We have a couple of firms which might be making a push: Citi, which rose from #8 to #6, and possibly UBS.  RBC is pushing but has a long way to go to reach the top ranks.  The remainder (Deutsche Bank, Goldman) seem to be content to tread water.  Jefferies, the bulge wannabe, seems to have given up.





About Author

Leave A Reply