The equity research business has had its ups and downs, but for Curt Launer it will always be home. The longtime Donaldson, Lufkin & Jenrette Securities Corp. oil and gas analyst is back in research, this time at Deutsche Bank Securities in New York, after a seven-year hiatus. In 2004 he retired from Credit Suisse (which had acquired DLJ) after racking up 19 appearances on the All-America Research Team in various natural-gas sectors. When Launer graduated from the State University of New York, Buffalo, in 1977, with a degree in accounting, he didn’t know what a sell-side analyst was. He went to work as an energy specialist at accounting firm Arthur Young & Co., which he followed with stints at Mobil Corp. and then Gruss Petroleum, a small exploration company. In 1984, Launer met a Wall Street research director who said that with his accounting background, energy industry experience and regulatory knowledge, he would make a great analyst. That year he joined L.F. Rothschild, Unterberg, Towbin in New York to cover natural gas.
“Many people today come up as analysts by background, then cover whatever industry comes along,” says Launer, 56. “That wasn’t my story.”
His experience at Mobil and Gruss gave Launer an edge over other natural-gas analysts. He stayed at L.F. Rothschild until 1987, when he joined DLJ. It was in this crucible that he flourished. By 1990 he was No. 1 in Natural Gas, after having been only a runner-up at L.F. Rothschild. He would go on to capture the crown nine of the next ten years.
Launer says it was “pretty easy to retire from equity research at the end of 2004,” when he joined Sagent Advisors, a New York boutique mergers and acquisitions advisory firm founded by former DLJ M&A veterans. Regulation Fair Disclosure, which prohibits companies from selectively disclosing information, had made it harder for analysts to get an edge.
“I never wanted to be the analyst known for having the highest number of pages,” he says. “I wanted to break down things to the most important points in the shortest number of pages. Reg FD didn’t help that; it requires so much disclosure.”
At the same time, Launer believed that the pure advisory boutique model would thrive in the new regulatory world. Sagent’s advisory business indeed flourished from 2005 to 2007, but during the financial crisis the heavily capitalized oil and gas industry needed more than what the boutique model could offer. In May 2010 he joined the corporate coverage group at Deutsche Bank to help build its master limited partnerships and midstream energy investment banking franchise.
This September, Launer moved to the research group. Though regulations are still in place to prevent analysts from getting directly involved in deals, Wall Street can’t offer investment banking without research. Launer says the opportunities are greater than even 20 years ago because the country’s energy needs have grown.
