Institutional Investor's Alpha Magazine - March 2008 - (Page 52) Top European Analysts London-based global head of valuation and accounting, and requires all equity analysts to discuss three possible scenarios on the second page of every research report: a base case for the stock; a bull, or upside, case; and a bear, or downside, case. “It forces people to constantly think about risk-reward trade-offs and the upside versus the downside — whereas they used to think in terms of just one number,” says Weyns, an ex-academic who spent 15 years on the faculty at Harvard Business School. Weyns developed the concept with JuanLuis Perez, the former London-based European head of research who is now The Leaders the firm’s New York–based global director of research. DEVELOPED EUROPE The top-ranked emerging-markets Total team research firm tells a similar comepositions First team Second team Third team Runners-up Rank from- behind story. “Hedge funds 2008 2007 Firm 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 pay to have an edge, and we pro1 Morgan Stanley 20 9 5 2 4 1 18 5 5 5 3 vide that edge by providing local 2 Merrill Lynch 19 8 4 3 4 2 16 6 2 3 5 information and analysis,” says 2 UBS 19 7 3 2 7 2 16 4 4 2 6 Roland Nash, head of research at 4 Credit Suisse 14 3 3 4 4 5 15 6 1 0 8 Renaissance Capital and leader of 5 JPMorgan Securities 10 2 2 2 4 7 10 3 4 0 3 the firm’s top-ranked teams in Rus6 Citi Investment Research 9 0 2 5 2 6 13 2 1 1 9 sia coverage and Equity Strategy/ Emerging EMEA Markets. In ad6 Deutsche Bank 9 0 5 0 4 2 16 1 5 6 4 dition to its offices in Moscow and 2 3 3 6 Lehman Brothers 9 1 3 2 2 2 8 9 Kiev, says Nash, the firm maintains 6 0 1 2 3 9 Goldman Sachs International 4 0 1 1 2 9 a major research presence in Almaty, 10 Exane BNP Paribas 3 1 1 1 0 11 2 0 1 0 1 the biggest city in oil-rich Kazakh11 Bear, Stearns International 2 0 0 0 2 9 4 0 0 3 1 stan, and is currently building out its 11 2 Sanford C. Bernstein & Co. 1 0 0 1 – 0 0 0 0 0 analyst teams in Lagos, Nigeria — “a 13 ABN Amro 1 0 0 0 1 – 0 0 0 0 0 $150 billion economy, with a popula13 Crédit Agricole Cheuvreux 1 0 1 0 0 12 1 1 0 0 0 tion that’s the same size as Russia’s.” 13 Euromobiliare 1 1 0 0 0 12 1 1 0 0 0 He notes, “We provide that on-the13 HSBC Bank 1 0 0 1 0 – 0 0 0 0 0 ground flavor of what’s going on.” 1 0 0 0 13 Oddo Securities 1 0 0 0 0 0 – In developed Europe, Morgan Stanley, Merrill Lynch and UBS draw EMERGING EMEA accolades for coming up with fresh Total team ideas for alpha- driven products. positions First team Second team Third team Runners-up Rank Fourth place goes to Credit Suisse 2008 2007 Firm 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 (whose representatives declined re1 Renaissance Capital 9 9 0 0 0 2 4 2 2 0 0 quests for an interview), which was 2 Deutsche Bank 5 2 2 0 1 2 4 1 1 2 0 fifth last year. 3 UBS 3 0 3 0 0 1 5 2 2 1 0 JPMorgan Securities’ research 4 Citi Investment Research 1 0 1 0 0 – 0 0 0 0 0 operation in London moves up two notches to fifth place, thanks largely 4 JPMorgan Securities 1 1 0 0 0 – 0 0 0 0 0 to José Linares, its head of research 4 1 0 0 1 0 4 * UniCredit Markets 1 0 0 1 0 & Investment Banking for Europe. 4 UralSib Capital 1 0 0 0 1 0 – 0 0 0 0 The big decliner from 2007 is Deutsche Bank, which slides from sec* Rank in 2007 was for Aton Capital Group, whose institutional business was acquired by UniCredit Markets ond place to sixth in developed Europe & Investment Banking in early 2007. Aton Capital ranked fourth last year; UniCredit was unranked. (the firm declined to comment). March international editions of II, list the top analysts as chosen by the broad investment community. Morgan Stanley’s success has not happened overnight (as recently as 2005 the fi rm’s European analysts were ranked No. 5). Much of the U.S.-based investment bank’s improvement can be traced to the efforts of its research department in London, which has developed an “open research” platform with what it calls a “risk-reward” methodology that has been adopted firmwide. The new approach is the brainchild of Guy Weyns, the firm’s More top-ranked analysts (left to right, top row): Benedict Uglow, Alastair Syme, Patrick Standaert, Michael Shillaker; (middle row): Jaime Vazquez, Andrew Wood, James Dawson, Adam Jonas; (front row): Menno Sanderse, Claire Kent, Geoffrey Ruddell. (Not pictured: Andrew Baum.) 52 • INSTITUTIONAL INVESTOR’S ALPHA • MARCH 2008
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