AllianceBernstein
Utilities
When Chris Braendli joined AllianceBernstein in May 2006, he was given a choice of covering either telecommunications or utilities. The London-based analyst says he surprised everyone by opting for utilities — a sector that is pretty exciting these days, given the recent volatility in commodities prices and the politics of climate change.
“Ever since I was a kid, I was always interested in politics and international affairs,” Braendli says. He uses his knowledge of those subjects to inform his analyses. For example, the outcome of last fall’s U.S. presidential election, he explains, was important not only to European renewable-energy companies, which build wind farms in the U.S., but also to coal producers and the future of clean coal technology, because of then-candidate Barack Obama’s campaign commitment to reducing U.S. dependence on foreign oil and to minimizing pollution. “Coal is still the cheapest and most available resource, and is heavily influenced by consumption in China,” he says.
Now 36, Braendli covers 40 utilities in developed and ten in emerging Europe (plus a further 40 in the emerging markets of Latin America). This year marks his first appearance on Europe’s Best of the Buy Side.
Over the next three years, he expects a wave of divestitures in Europe’s utilities sector, born of the credit boom having turned into a bust. Many companies will be forced to sell some of their recent debt-financed acquisitions, he says, although “a lot of them haven’t yet clearly defined what they want to dispose of. They have to decide what their core business is, and dispose of businesses that are not as relevant or not as recognized by the market.”
The Swiss native says that “one of my credos, even before the credit crunch, was that strong balance sheets were not valued enough by the market.” Even now, he adds, he wishes people were more skeptical about high leverage. “I’ve always looked at credit-default-swap spreads on my names on a daily basis — and if the spread is wide, there’s usually a problem in the balance sheet,” he observes.
Braendli, who earned a bachelor’s degree in computer science from Switzerland’s Eidgenössische Technische Hochschule Zürich in 1997, says he discovered a “passion for economics and finance” at Harvard University, where he spent a year as part of his undergraduate work at ETH. After graduation he joined UBS in Zurich, where he worked in mergers and acquisitions, and then moved to Capital Dynamics, a start-up private equity firm in Zug, Switzerland. He then spent two years at Lehman Brothers in
London, working in convertible bond institutional sales.
Those jobs “really gave me a good understanding of credit and of how a company finances itself,” Braendli says. “I like people, so it was natural to go into sales. But I was frustrated because it was never my investments but always my clients’ or my traders’ positions.” He was drawn to equity analysis, he says, so that he could be “part of the investment decision.”
Braendli earned an MBA from the University of Pennsylvania’s Wharton School in 2004. While at Wharton, Braendli was one of two social representatives for a 60-member cohort in his class of 800, and he was responsible for organizing student get-togethers — a practice he continues to this day, meeting with former classmates and other friends in London’s financial district. “We discuss the markets and other things, like our families and friends,” he says.
Sell-side analysts praise Braendli for his “meaningful and original comments” and willingness to “stress-test his ideas.”
Braendli readily acknowledges that he loves to debate. “I want to make sure I understand what other people are thinking about a particular stock,” he says. “I don’t want to miss anything.”
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