For the best new talent in equity research, look to Citigroup.
The firm dethroned RBC Capital to place first in Insitutional Investor’s annual ranking of the Rising Stars of Wall Street Research. Fifteen Citi analysts were named Rising Stars – the most of any firm. Bernstein placed second, with twelve ranked analysts, while RBC Capital came in third with eleven Rising Stars.
Each year, Institutional Investor asks voters in the broader All-America Research Team survey to identify the up-and-comers – analysts who have been publishing research for less than three years in any region – who seem destined for greater glory. The result is the Rising Stars.
Rising Stars who spoke with Institutional Investor cited the mentorship offered by senior employees at their firms as key to their success. Among those analysts was BMO Capital Market’s Ketan Mamtora, who ranked for his coverage of the paper and packaging sector.
“The environment here is very engaging,” Mamtora said. “The seniors are really supportive, always willing to help and to sit down and talk.”
BMO ranked sixth this year, with five Rising Stars.
[Yearn to Learn: Molding the Rising Stars of Wall Street]
Citi research analyst Daniel Jester, who covers the chemicals sector, attributed his firm’s first-place ranking to its investments in new talent.
“Over the past year, the firm has increased training and development opportunities for emerging analysts as well as increased the sales resources for targeting portfolio managers working on small and mid-cap companies,” Jester said via email.
Similarly, Salim Syed, who began working for Mizuho Securities as a publishing analyst this year and was ranked first in the large-cap biotechnology sector, said Mizuho’s management has allowed him to grow as an analyst alongside the firm’s equities research team. ]
“It’s a growing platform,” Syed said. “There’s the opportunity to grow something new. I’ve enjoyed that aspect. There’s an entrepreneurial side to it.”
Other analysts pointed to the advantages of working at a non-bank research firm ahead of the update to the Markets in Financial Instruments Directive, or MiFID II – European regulation that will change the way research is paid for.
Autonomous Research’s Matthew O’Neill, who ranked first for his coverage of payments, processors and IT Services, was among the analysts heralding these benefits.
“It is research sales and trading only,” O’Neill said of his firm. “From an analyst’s time perspective, that’s really helpful because we don’t have to initiate on certain stocks.”
Krishna Sinha, who ranked second in the aerospace and defense sector, spoke similarly of his firm, Vertical Research Partners.
“Being separate from a bank has a lot of perks,” Sinha said. “We don’t have to cover stocks just because bankers want to do a deal.”
Still, the up-and-coming analysts at larger, more traditional research firms said they too could stand to benefit from the changing industry. Michael Cyprys, a Morgan Stanley analyst who ranked first in covering asset managers, brokers, and exchanges, said he is “excited about all the change happening in the industry.”
“It creates opportunity for a relatively newer analyst,” he said.
Others, including Deutsche Bank retailing and department stores analyst Tiffany Kanaga, said they were looking forward to what the next year would bring to their industry.
“It’s an exciting time to be covering retail and to be in sell-side research,” Kanaga said. “We have to keep focused on finding opportunities to highlight interesting ways to cover our stocks.”