Institutional Investor's Alpha Magazine - December 2008 / January 2009 - (Page 50)

The Leaders Rank 2008 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 15 15 2007 1 2 4 7 9 4 8 9 11 12 4 13 14 14 19 14 — Firm JPMorgan Securities1 Barclays Capital2 Merrill Lynch UBS Credit Suisse Citi Goldman, Sachs & Co. Morgan Stanley Sanford C. Bernstein & Co. Deutsche Bank Securities Banc of America Securities ISI Group Wachovia Securities Oppenheimer & Co.3 Buckingham Research Group Natixis Bleichroeder Piper Jaffray Total team positions 2008 36 35 29 26 23 22 20 17 16 14 8 5 4 3 2 2 2 2007 36 31 21 20 15 21 17 15 14 12 21 4 2 2 1 2 0 First team 2008 14 11 6 6 2 5 4 4 3 1 1 4 0 0 0 0 0 2007 10 10 3 7 4 7 1 5 2 1 4 3 0 0 0 1 0 Second team 2008 9 9 8 7 4 4 4 2 4 1 3 0 1 1 0 1 0 2007 12 10 4 2 2 5 1 4 2 0 7 0 1 1 0 1 0 Third team 2008 7 4 5 7 7 6 3 1 3 5 1 1 2 1 0 1 1 2007 7 6 6 3 4 2 6 3 3 5 4 0 1 1 0 0 0 Runners-up 2008 6 11 10 6 10 7 9 10 6 7 3 0 1 1 2 0 1 2007 7 5 8 8 5 7 9 3 7 6 6 1 0 0 1 0 0 1 Rank and team positions for 2007 were for Bear, Stearns & Co., which JPMorgan Chase & Co. acquired in May; JPMorgan Securities ranked third last year. 2 Figures cited, including 2007 rank, refer only to Lehman Brothers researchers who moved to Barclays Capital after this year’s polling was concluded. Analysts who were with Barclays before its parent ﬁrm acquired Lehman in September were tabulated separately. Barclays Capital did not rank last year. 3 Rank and team positions for 2007 were for CIBC World Markets, which Oppenheimer & Co. (unranked last year) acquired in January. Bear Stearns Cos. and JPMorgan Chase & Co. He credits his ten years of Wall Street experience, a loyal client base and Zelman’s example for his transition. “Talking with Ivy and learning what it would take gave me conﬁdence,” says Wolfe, who is based in New York. “But you can’t do it without a following.” To determine which analysts have the greatest following within the hedge fund community, we recalculated the results from the All-America Research Team conducted in the summer and published in October by our sister publication, Institutional Investor, using the votes only from hedge funds. For Alpha’s sixth annual ranking, we culled the responses of more than 850 hedge fund investment professionals, including representatives from more than two thirds of Alpha’s 2008 Hedge Fund 100, our annual ranking of the world’s biggest single-manager ﬁrms (Alpha, May 2008). This year’s analyst ranking emerges in the midst of widespread market turmoil. Once-venerable ﬁrms like Bear Stearns, Lehman Brothers Holdings and Merrill Lynch & Co. have failed or have been or are to be merged into bigger companies. “If anyone on the planet told you it could get this crazy, they’d be lying,” says Glenn Schorr, a ﬁrstteam Brokers & Asset Managers analyst for UBS. “There’s an unbelievable unwinding of conﬁdence.” Against this backdrop — one Schorr says is nothing less than “surreal” — JPMorgan Securities tops this year’s overall ranking, with 36 total team positions, including 14 ﬁrstplace winners. JPMorgan edges out the Lehman team — now a part of Barclays Capital, which acquired the research operations of Lehman the day after that ﬁrm went bankrupt in September and receives credit in our ranking. Hedge fund managers are a demanding lot. Hard work, fundamental research, independence of thought and a willingness to buck the consensus are among the qualities they cite when asked about their criteria for naming their favorite analysts. Creativity and ﬂexibility are also prized. “The way that analysts think about things is certainly different now,” says Thomas Stephens, a senior buy-side analyst who follows the banking sector at Chicago-based Citadel Investment Group. “We want analysts who are taking a fresh perspective on issues every day and are not anchored in historical views on companies. We’re anchored in producing alpha, and we want our analysts to be partners in seeking that as well.” Stuart Linde, New York–based director of Americas equity research at Barclays, adds that hedge funds are increasingly demanding “a sense of urgency and accessibility” and that they expect more speciﬁcs than ever. “Analysts are being asked to mine their networks of industry contacts for certain data points that hedge fund portfolio managers can piece together for their own investment theses,” he explains. As much as hedge funds rely on analysts, the relationship is mutual. Hedge funds make up as much as 40 percent of an equity analyst’s clientele, and many ﬁrms are ramping up hedge-fund-centric ser vices. Most notably, Merrill Lynch, No. 3, with 29 team positions, including six ﬁrst-teamers, in early June put a 30 percent limit on the 50 • INSTITUTIONAL INVESTOR’S ALPHA • DECEMBER 2008/JANUARY 2009

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - December 2008

Institutional Investor's Alpha Magazine - December 2008 Contents Letter from the Editor Longs & Shorts Inside the Trade Pension Corner The Good Guys Interview: Stanley Fink Cover Story: The New Regulatory Reality United States: The Usual Suspects Europe: Flirting with Unity Asia-Pacific: What Asian Contagion? In Theory In Focus Strategies Research Center Alpha Bytes Unhedged Commentary

Institutional Investor's Alpha Magazine - December 2008

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