New York, NY – A few weeks ago we wrote an article about BNP Paribas’ plans to hire 200 equity capital markets professionals over the next few years. Some have wondered if other sell-side firms are expanding their research departments like the French bank. After a little research, we have discovered that quite a few other sell-side firms have either been hiring research analysts, or are planning to do so in the near future. The following blog discusses a few of these developments.
Jefferies & Company
One sell-side firm which has been actively hiring equity research analysts, salespeople, and investment bankers over the past eighteen months has been global securities and investment banking firm, Jefferies & Company. Recently, Jefferies announced the hiring of two senior industrials analysts — R. Scott Graham and H. Peter Nesvold as Managing Directors and Senior Equity Research Analysts covering Diversified Industrial and Automotive / Transportation companies.
Jefferies’ Global Industrials Equity Research Group is now comprised of 12 senior analysts, covering approximately 180 companies in the across the Aerospace & Defense, Automotive, Building Materials, Chemicals, Diversified Industrials, Engineering & Construction, Machinery, Metals & Mining, Paper & Packaging and Transportation industries.
A few weeks ago, Mizuho Securities USA, the U.S. broker-dealer subsidiary of the Mizuho Financial Group, announced the launch of its US equity research group by hiring five (5) senior research analysts covering the Clean Technology, Telecommunications Equipment, Telecommunications Services, Enterprise / Infrastructure Software, and Healthcare sectors.
The newly hired analysts include Paul Clegg, Senior Analyst, Clean Technology; Peter Lawson, Senior Analyst, Life Science and Diagnostics; Gabe Lowy, Senior Analyst, Enterprise and Infrastructure Software; Joanna Makris, Senior Analyst, Communications Technology; and Michael Nelson, Senior Analyst, Telecommunication Services. These analysts will report to Carmine Grigoli, Mizuho USA’s Director of Research and Chief Investment Strategist.
Despite announcing disappointing earnings recently, Nomura Holdings said it will stick to its bullish US hiring plans. In the past 18 months, the Japanese bank doubled its headcount in the Americas to 2,186. Earlier this year Nomura Securities said they plan to hire almost 100 in equity research in 2010, including about 20 publishing analysts.
A few of the key hires that Nomura has made in its US equity research department in 2010 include Michael Rietbrock (Head of US Equity Research), Glenn Schorr (Brokers and Asset Managers), Harry Curtis (Gaming, Lodging & Leisure), Brian Foran (Banks), Michael Nathanson (Media & Advertising), Brian Nowak (Internet), Shannon O’Callaghan (Multi-Industry) and Romit Shah (Semiconductors).
It is interesting to note that despite Nomura’s reiteration that it still plans to aggressively expand in the US, the firm set aside 13% less for compensation in the first six months of the company’s fiscal year.
Standard Chartered Plc, the U.K. bank which makes most of its profit in emerging markets, said earlier this year that it plans to double its equities research team in 2010. The bank plans to cover 650 companies in Asia, outside of Japan and Australia, up from the 250 stocks that it covers now.
The bank has doubled the staff in its cash equities business to almost 200 people since the beginning of this year. It wants to increase that number by the high double digits in 2011 as it spies opportunities in India, South Korea and Indonesia.
BMO Capital Markets
Earlier this month, management for Toronto-based BMO Capital Markets said that it is looking to significantly expand its presence in the U.S. cash equities marketplace based on building a reputation for best-in-class research for U.S. equities. Currently the firm covers 932 companies, of which 515 are US stocks. The firm says that its US coverage “will continue to grow as we focus on hiring highly experienced, industry-expert analysts.”
According to the Wall Street Journal, William Tanona, a former banking analyst with Goldman Sachs is planning to join the U.S. equity research department at UBS. Mr. Tanona is expected to replace Glenn Schorr, who left UBS to join Nomura in June. Mr. Tanona previously worked at Goldman Sachs from 2005 until November 2008. Thereafter, he joined London-based Collins Stewart Plc in early 2009, a firm he left in August of this year.
As you can see from the information provided above, a number of sell-side investment banks have been expanding their equity research and equity capital markets businesses in 2010, with a number of firms looking to continue this trend in 2011. The big question we have is will the pickup we have seen in IPO and M&A volume be able to support this type of hiring — particularly given the slump in equity trading volume and cash equity commissions we have seen for much of 2010?