For one London-based bond buyer, the European sales team at J.P. Morgan earned its spurs last September on a debt-financing deal for Mexico City’s new, $13 billion international airport, among the largest infrastructure projects in the world.
At issue for the financier was that a special-purpose vehicle — rather than the Mexican government — was the bond issuer and the party backstopping the credits. In addition, several technical concerns had cropped up. “We had a number of questions about the way the deal was structured with the SPV,” the London financier reports, “and we had accounting questions over how they calculated cash flow and net income.”
But a rapid response by the J.P. Morgan fixed-income sales team in Europe helped clarify the deal. The squad speedily arranged a conference call for the prospective investor to speak with bankers in New York and Latin America, who explained the intricacies involved in the dual-tranche, $2 billion bond offering, with evenly split ten-year and 30-year maturities, on which J.P. Morgan acted as global coordinator and joint book runner. “Basically, they described to us the mechanics of the SPV and how the bonds would be paid for,” the satisfied financier recalls.
What further cemented this investor’s loyalty to J.P. Morgan’s European sales team was the contrast to his much less happy experience with a rival firm on a separate bond purchase, where “the competitor didn’t make an effort to set up a conference call” when he had questions about the financing. The bottom line, he says, is that “J.P. Morgan is more proactive, and they really understand what the client’s needs are.”
The Londoner also lauds the smooth workings of J.P. Morgan’s fixed-income European sales team and its coordination within the firm’s sprawling global organization. “Whether it’s Mexico or Brazil or Russia,” he says, “you always want to have one point of contact for any deal you’re interested in.”
Outstanding client service is a major reason that J.P. Morgan claims the No. 1 position in Institutional Investor’s All-Europe Fixed-Income Sales Team for 2017. “They have a clients-first culture,” explains another European investor.
JPM is followed by BNP Paribas and Citi to round out the Big Three. To gauge sales team rankings, we asked 239 buy-side analysts and money managers at more than 150 European firms managing some $3.8 trillion in fixed-income assets who participated in the 2017 All-Europe Fixed-Income Research Team survey to rank the best generalist salespeople.
A dozen follow-up interviews revealed that, along with solicitude for clients’ needs, buy-siders most frequently hail idea generation, pricing, and an ample supply of product offerings as criteria for preferring one firm’s sales team over another’s.
“I trade in government bonds and non-U.S. agencies, and I’ll trade with the bank that shows me the best price,” says a Scandinavian investor who cites J.P. Morgan as his go-to firm.
The firm’s clout and reputation count too. “J.P. Morgan is a bulge-bracket firm, and they’ve been around a long time,” notes one German bond investor. “They’ve always been there, they’ll be there tomorrow, and it’s easy to have trust in them.”
JPM is also a financial emporium, a firm that “offers every kind of product,” says another London investor. “They do everything, even stuff that other banks aren’t doing anymore, like single-name credit default swaps.”
Meanwhile, BNP Paribas can claim its share of clients who swear allegiance to the French firm. “They provide good access to research, strategy, feedback, investments, and they’re quite active in terms of access,” says one bond buyer in Italy. “They often have special offers on some bonds, and you can always talk to them quite freely.” He adds, “We’re an insurance company, and so we’re plain-vanilla investors, and they’re aware of our needs. Other firms are less proactive.” Less-favored firms, he points out, often “try to sell you cappuccino when all you want is coffee.”
Yet another London investor makes a similar point about BNP Paribas: “We’re long-term, buy-and-hold investors, and they adapt to our needs and don’t bother us with stuff we don’t do.” This investor compliments the French firm for keeping him up-to-date with news flow and important events that influence the market. The sales team, for example, recently “organized a conference call with its top economists to discuss the minutes of the last ECB meeting and explain the crucial dates for its quantitative easing announcements.” He adds, “They’ve also been a good source of feedback and analysis on the U.S. elections.”
Citi wins kudos from its loyal clients as well. “We’ve had a strong relationship with them for many years,” says a Danish investor. “What they do well, first, is provide broad coverage in terms of names; second, they have a strong research effort, and, thirdly, they’ve been very fair and open on whom they’re working with if we’re in a bidding situation for the same assets.”
“They also give us the opportunity to buy into situations at an early stage,” this investor notes, citing an oil and gas sector leveraged buyout where “they plugged us into bank paper” at an early stage of the deal.
A London investor finds Citi to be “the best at prioritizing and understanding the client and talking to us about relevant products. They also do the best job holding prices on a trade. And they’re probably the strongest counterparty we see.” Citi impresses him by being “comfortable at doing large-ticket trades,” he says.