One year into the new regulatory era of European sell-side research, a trio of firms have emerged as the top providers for hedge funds and traditional buy-side clients alike.

UBS, Citigroup, and JPMorgan Chase & Co. claimed the top three spots in the 2019 All-Europe Research Team: Hedge Fund Cut, echoing the results of the broader All-Europe Research Team survey, which included responses from long-only asset managers and asset owners in addition to hedge funds.

The hedge-fund only ranking — which UBS led for the second year in a row — featured more or less the same top-six firms as the larger survey. This suggests that alternatives firms and their buy-side peers have aligned their tastes following the second Markets in Financial Instruments Directive (MiFID II), which unbundled research from trading last year.

Citi and JPMorgan came second and third in the hedge fund survey, respectively, matching their positions in the main All-Europe Research Team ranking. Fourth place went to Morgan Stanley, which ranked sixth among the broader buy-side universe, while Bank of America Merrill Lynch and Exane BNP Paribas placed fifth and sixth, respectively — one spot lower than each ranked on the main roster.

[II Deep Dive: The New Normal of European Research]

The results were based on the input of more than 440 hedge fund managers at 270 firms managing roughly $163 billion in European equities. These responses were then weighted based on each respondent’s level of assets under management.

Of the top-six firms, three — UBS, JPMorgan, and Exane BNP Paribas — repeated their positions from last year’s ranking. BofA Merrill Lynch fell one spot from fourth last year, while Morgan Stanley slipped two rungs from second place.

The most improved firm in the eyes of hedge funds was Citi, which surged to No. 2 from seventh place in 2018. The firm had a similar trajectory in the all-buy-side ranking, where it climbed to second place from sixth. 

As Citi rose, Deutsche Bank fell. The German bank plummeted to eleventh place, after earning the No. 5 spot among hedge funds last year.

To better reflect the firms earning the highest share of research dollars, II also looked at survey responses weighted by commissions. But the top rankings for UBS, Morgan Stanley, BofA Merrill Lynch, and Exane BNP Paribas did not change. Citi and JPMorgan, however, switched positions under that methodology, with JPMorgan claiming second in the commission-weighted ranking.

Deutsche Bank also performed better in the commission-focused roster, tying for eighth place with Credit Suisse and London-based Redburn.