What with monitoring market activity and economic data, meeting with managements and kicking the tires, so to speak, at the companies they cover, sell-side equity analysts dont have as much time as they might like for direct interaction with clients. That role often falls to the members of a firms sales team, who promote the analysts research, arrange meetings with corporate executives, coordinate road shows and perform a thousand other tasks that fall under the general heading of customer service.
A good institutional sales team understands research from the clients perspective, one U.S.-based participant in the 2011 All-America Research Team told Institutional Investor. (We keep confidential the identities of the survey respondents and their firms to ensure their continuing cooperation.) The team has to have a good understanding of our investment process and recommend research that fits our style.
We asked this money manager and others who cast votes in this years survey to tell us which firms field the best teams when it comes to U.S. equity research sales. We heard from investment professionals at roughly 90 percent of the participating buy-side institutions; these firms control three out of every four of the $12.7 trillion invested in U.S. equities. (In the navigation table to the right, click on Methodology for more information about how this ranking was compiled.)
When it comes to sales, Morgan Stanley is the clear favorite and takes the top spot on the inaugural All-America Sales Team.
The team at Morgan Stanley has done an excellent job of providing access to analysts in a timely fashion, says one buy-side backer. They also provide value-added ideas and trading color for the sector and the companies that we cover.
A portfolio manager from China is similarly enthusiastic. Morgan Stanleys U.S. sales team has the broadest coverage and the most proactive attitude they tailor their services not just for different clients, but even for different individuals within the same client firm, this survey participant says.
Nick Savone, who with Suzanne Charnas directs Morgan Stanleys U.S. equity research sales efforts, notes that clients are becoming increasingly global in their approach as they need to consider the impact of macroeconomic forces in their analysis. The firms analysts collaborate across regions and investment disciplines to deliver broad-based research to clients.
In post-polling interviews with respondents, some money managers told us about certain reps who they felt deserved special recognition. Among the comments we heard: Laura Adams understands my strategy and is very helpful in screening analyst content I leverage her thorough knowledge of the Morgan Stanley research product and thereby save time in evaluating ideas; John Kelly is one of the most thorough and diligent sell-side representatives in the industry; London-based Guy Trust has a unique fundamental understanding of our investment process and therefore provides great tailor-made service its all about taking the time to understand what we are looking for, and he takes that time; and technology sector specialist Tom Wigg has excellent context and relays it on a timely basis, with a one-stop e-mail or call about what is happening in tech.
Austin Zeigler was cited most often, with clients noting that the utilities specialist is very proactive and well informed about the sector his earnings summaries and weekly calendars are very useful tools, and another pointing out that Zeigler is very timely and very thorough, and he does it all without the support of a utility-sector industry analyst which makes it all the more impressive.
J.P. Morgan was deemed to have the second-best sales force. Its all about service and J.P. Morgan provides a high level of it, insists one supporter.
Terrific team all around, adds another. Whenever Ive asked them for something, the turnaround time is immediate. Whatever Ive asked for, theyve always gone out of their way to get it for me. They are the definition of a helpful sales team they dont bombard you with unnecessary stuff, they just give you what you need to do your job well.
Several clients pointed to the teams ability to access the firms expansive platform. They leverage the resources available to them including equities, sovereigns, corporates, high yield, foreign exchange, commodities, politics and more, says one New York-based asset manager, while a buy-side enthusiast from the opposite coast declares that J.P. Morgan has one of the most comprehensive suites of research offerings out there, across sectors and asset classes, and our rep does a great job of sending the most relevant research and calling daily to try to answer our questions, get feedback, talk about upcoming events, and coordinate follow-up with analysts when necessary.
Michael Bossidy, a 12-year veteran of J.P. Morgan who oversees distribution for the Americas, notes that client expectations have changed amid the global financial turbulence.
Previewing and reviewing quarters has taken a back seat to more dynamic research, Bossidy says. Clients continue to look for research on companies they cant gain from their general portfolio management or analyst seat. This speaks to items such as product sizing, product launches, plant developments, market developments, pricing developments, sizing of growth and margin opportunities, client surveys, market trends, product surveys, and insights into supply chains.
To gather this information, the 61-strong J.P. Morgan squad supporting U.S. equity research sales has offices in London to serve clients across Europe, and in Atlanta, Boston, Chicago, New York, St. Louis and San Francisco to work with clients in the Americas.
Investors are impressed. They know the names in our portfolios and are able to get us in front of relevant management teams it also helps that they understand how each of our portfolio managers likes to receive research, says one. We also never have a problem getting into conferences or access to analysts.
BofA Merrill Lynch Global Research, which comes in fourth, has a sales team that is extremely responsive and knows how to leverage its best-in-class in-house research, observes one satisfied client. Some of the most valuable company management meetings Ive had were through BofA, because their sales team understands what we are interested in and their analysts have the network to get those meetings.
What interests investors most these days? Macro thematics and global sector coverage are increasingly important in a world shying away from single-stock risk, observes Steve Keller, head of Americas equity research sales. However, even in these times of macro themes we know our clients value alpha-generating ideas and our research department is focused on this effort.
Keller manages a team of 60 salespeople in 11 offices around the world: Hong Kong and Tokyo in Asia; Frankfurt, London, Paris and Zurich in Europe; and Boston, Chicago, Dallas, New York and San Francisco in the U.S. About 70 percent of his staff is U.S.-based, he adds.
This team is also praised for its talent in accessing a platform that extends beyond equities. We have sales coverage across multiple asset classes high-yield bonds, convertibles, credit default swaps, options. Between all those professionals they do a good job coordinating events and meetings and shooting us relevant research.
Some salespeople were singled out for special praise. John Guster is responsive and often attends the meetings himself to better understand the issues that concern us, we were told, while media specialist Joel Armijo is a great source of information.
One asset manager in the New York City area rolled out the superlatives when talking about BofA: Theyre the best sales team on the Street hands down indispensible.
UPDATE: This article has been revised to show Deutsche Bank Securities finishing in third place, BofA Merrill Lynch Global Research coming in fourth and Barclays Capital landing at No. 5. The original article was based on results incorrectly reported, owing to a programming error. The leaders table is correct as originally posted.