Institutional Investor's Alpha Magazine - November 2007 - (Page 62)

Top Analysts says the ﬁrm has undertaken in the past year or so are ex- other’s data as inputs into their company models and to create pansion of its global research coverage, a new in-house “best bigger joint research reports. “We can cover more companies practices” Web site for analysts and a podcasting research and subsectors than our competitors and get more-detailed delivery system — digital media ﬁles distributed online. information, and that helps generate alpha,” says Feinstein. As hedge funds have expanded their geographical reach in Firms have redoubled their efforts to ensure that analysts’ their search for higher returns, Bear has added roughly 15 new ideas and recommendations are backed by rational assumpcoverage areas, including India and various sectors in Asia, tions and strong working models. Lehman has made a concertEurope, Latin America and the U.S. The ﬁrm has increased ed push during the past year on this front. Linde says the ﬁrm’s its product management team to seven, from one a year ago. analysts have gone through every model to make sure that the Lehman, which slips to second place this year, experiences inputs and assumptions used are correct and still hold. “Model declines in both its number of ﬁrst-team rankings (the ﬁrm quality is critical in our goal of delivering the best valuation has ten ﬁrst-teamers this year, down from 19 in 2006) and and analytical frameworks for our clients,” he says. “Hedge funds are continually looking for actionable runner-up spots. Hedge fund voters award Lehman 31 overall team positions, down from 47 last year. The ﬁrm was hurt ideas and proprietary data that will give them an edge over by the departure of a few star analysts but also suffered from their competitors,” says Gregory Ransom, who became changes to our methodology. Mortgage Finance and Specialty global head of equity research for Banc of America SecuriFinance, for example, were combined to create Consumer Fi- ties in August. “To deliver on this expectation, you must be nance. (For more information about our methodology, please able to look across the capital structure of a company — not visit www.alphamagazine.com.) Still, fund managers contin- just at equities — to provide your clients with a deeper understanding of how data points and trading in one market ue to value Lehman’s strong research culture. “We’re successful with hedge funds because our analysts can impact other securities prices.” are proactive,” says Stuart Linde, the ﬁrm’s director of equiBofA’s Daniel Oppenheim, who advances from runner-up ty research for the Americas. “We ask: ‘What are the lateral to No. 2 in the red-hot Homebuilders & Building Products impacts?,’ ‘What’s the best way to play a company?,’ and sector, developed a proprietary monthly survey of roughly ‘How does it impact its global counterparts?’” 4,000 residential real estate agents, sorted by market. The Behind Lehman, JPMorgan Securities drops one notch to No. 3, with 26 positions, followed by Banc of America Securities, Citi and Merrill Lynch in a three-way tie for fourth place, with 21 positions each. Last year, BofA, Bear Stearns, JPMorgan RANK TOTAL TEAM POSITIONS Hedge AllHedge Alland UBS tied for second, while Citi funds America FIRM funds America and Merrill tied for sixth. UBS falls to seventh place this year, with 20 1 2 Bear, Stearns & Co. 36 38 total team positions, down from 25 2 1 Lehman Brothers 31 44 in 2006. Rounding out the top ten, 3 4 JPMorgan Securities 26 33 Goldman, Sachs & Co. finishes at 4 6 Banc of America Securities 21 23 No. 8, and Credit Suisse and Morgan 4 3 Citi 21 37 Stanley tie for ninth place. 4 5 Merrill Lynch 21 30 Coordinating research across sec7 8 UBS 20 20 tors and asset classes has been one 8 9 Goldman, Sachs & Co. 17 15 of the driving themes of sell-side 9 11 Credit Suisse 15 12 research for the past few years. In an 9 9 Morgan Stanley 15 15 effort to leverage their intellectual capital, firms are pushing their 11 7 Sanford C. Bernstein & Co. 14 22 analysts to publish joint research re12 12 Deutsche Bank Securities 12 8 ports and sponsor joint conference 13 13 International Strategy calls. Lehman’s health care services & Investment Group 4 5 team, comprising Health Care Tech14 18 CIBC World Markets 2 1 nology & Distribution ﬁrst-teamer 14 18 Cowen and Co. 2 1 Lawrence Marsh, Health Care Facili14 14 Natixis Bleichroeder 2 2 ties second-teamer Adam Feinstein 14 — Pickering Energy Partners * 2 — and Managed Care second-teamer 14 14 Wachovia Securities 2 2 Joshua Raskin, hosts joint conference * Pickering Energy Partners and Tudor Capital Partners merged effective August 3; the combined calls and investor trips for clients. company is Tudor Pickering & Co. The ﬁrm’s analysts also use one an- Hedge fund leaders versus All-America Research Team 62 • INSTITUTIONAL INVESTOR’S ALPHA • NOVEMBER 2007 http://www.alphamagazine.com

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - November 2007

Institutional Investor's Alpha Magazine - November 2007 Contents Letter from the Editor Longs & Shorts Pension Corner: Patriot State The Good Guys: College Connection Interview: Currency of Change Cover Story: Comeback Kid Strategies: Masters of Art Research Center: Alpha Awards: Top Technology Providers Top Analysts Alpha Bytes: Critical Choice Unhedged: Commentary: Banking on a Bubble

Institutional Investor's Alpha Magazine - November 2007

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