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How UBS Tore Down a Car — and Rebuilt Its Research Practice

The firm was recognized as the world’s best equity research provider in Institutional Investor’s annual ranking of the top global research companies, thanks in part to its innovative Evidence Lab.

  • By Amy Whyte

Thirty-nine UBS analysts seeking insight into the burgeoning electric-car industry acquired a Chevrolet Bolt — and broke it into parts.

The teardown of the Bolt, assisted by automotive specialist Munro & Associates, was the basis of what would be one of UBS’s most popular research reports this year: a deep dive into how the global automobile industry and its feeder industries could be disrupted by the rise of electric vehicles, based on a piece-by-piece analysis of what went into the making of the mass-market Bolt.

“It was about trying to understand the implications of the Tesla models,” explains Barry Hurewitz, global chief operating officer of UBS Group Research. “It turned out it was much cheaper to produce the cars than our analysts had thought going into it.”

In fact, $4,600 cheaper — a finding that led the UBS analysts to raise their estimation of the profitability of electric vehicles, as well as to re-examine the effects of the growing market on traditional auto-parts suppliers.

It also made clients happy. Although UBS took third place in Institutional Investor’s 2017 Top Global Research Firms ranking, which includes fixed-income research, it placed first in global equities research. With a total of 162 positions across II’s 2017 equity research surveys, the firm rose to the top of the global equities category from second place last year and fourth place in 2015.

Bank of America Merrill Lynch, the best-ranked equity research firm in 2016, slid to second place with 150 team positions, down from 157 last year. Meanwhile, JPMorgan Chase & Co. — the top-rated research firm overall, including all regions and categories — placed third in equities research. The Bolt project was just one of around 2,000 reports produced this year by UBS’s Evidence Lab, a group launched four years ago to better incorporate tools like quantitative market research, digital footprint analysis, data science, geospatial analysis, and statistical modeling into the firm’s investment research.

“We have experts and specialists doing the heavy lifting,” Hurewitz says. “An analyst isn’t a geospatial expert; they’re not experts in [programming language] Python. For the first time, analysts are being expected to collaborate with other specialists.”

The goal, Hurewitz adds, is to uncover data — “evidence” — that supports an analyst’s view.

Four years into this revamp of UBS’s research department, led by global research head Juan-Luis Perez after he joined UBS from Morgan Stanley in 2013, the firm is gaining recognition from money managers around the globe as one of the world’s best equity research firms.

“The secret is not data; it’s not even the analysts,” Hurewitz says. “It’s creating new ways of thinking.”


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