All America Research: The Independents


Yesterday we analyzed investment banks’ commitments to research through the lens of the latest Institutional Investor All America Research poll.  Today we examine the independents.

Is Sanford C. Bernstein & Co. an independent?  It has flirted with investment banking, although not very deeply. Whatever it is, it continues to have a solid research franchise, keeping the #7 spot despite a decrease in its ranked analysts from 24 to 23.

Bernstein’s loss can be attributed to a new indie firm.  Craig Moffet left Sanford C. Bernstein, in January of this year after more than 10 years at the firm.  Moffett had been ranked No. 1 among U.S. cable and satellite analysts for seven consecutive years in the All America Research poll.  He was joined last month by Michael Nathanson, a top ranked media analyst, and the firm was renamed MoffetNathanson LLC.  Nathanson was counted in current poll under Nomura, his previous employer.  Moffet apparently didn’t make the poll this year because his firm was not cited.

More interesting is the fate of ISI Group, which despite the continuing defection of key staff holds it own at the #10 spot with no change in the number of its ranked analysts.

ISI kept its standing despite the loss of its policy team of Andy Laperriere and Roberto Perli, which has been ranked #1 in Institutional Investor’s policy category for the past 2 years.  Laperriere and Perli joined ISI co-founder Nancy Lazar in forming a new macro research shop, Cornerstone Macro, this past spring.

Cornerstone Macro debuted on the All America Research poll at #13, tied with RBC and Wolfe Research with 4 ranked analysts each.   Wolfe Research lost its star strategist, François Trahan, to Cornerstone reducing the number of ranked analysts from 5 to 4.

It is extraordinary how many ISI Group alumni bask in the All America Research rankings.  All four of Cornerstone’s ranked analysts are refugees from ISI.  Chris Senyek, a  top-ranked head of Accounting & Tax Policy research at Wolfe Trahan is also ex-ISI.  So too is Jason Trennert of Strategas Research Partners LLC, another ranked strategist.  Trennert was Trahan’s predecessor as Chief Investment Strategist at ISI.

Renaissance Macro, which has 2 ranked analysts, is another ISI spinoff.  Jeff deGraaf, the top ranked technical analyst in the II poll, left ISI in 2011 to start his own firm.

Despite the loss of talent, ISI Group keeps on trucking, which is a tribute to the sales and trading infrastructure that Ed Hyman has built as well as to the depth of the research staff.  It also helps to explain why the turnover at ISI persists.  ISI prospers despite defections and hence does not feel compelled to pay star salaries.  Meanwhile defectors have been successful so far keeping their franchises.

Other successful independents include Empirical Research Partners (2 ranked analysts), Washington Analysis (1 ranking) and Ivy Zelman, who remains the top-ranked building analyst.



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