Amid unprecedented times, a new firm has taken the crown in Asia equity sales.
Some 1,200 money managers elevated UBS from last year’s second place finish to No. 1 in Institutional Investor’s 2020 All-Asia Sales Team, based on its sales coverage across 12 Asian countries. Respondents were asked to rate sales teams on six attributes, including their ability to add to value to research, generate ideas, and provide a global context. In a decisive performance, UBS ranked first in every attribute.
After 2019’s debut in the pole position, Citigroup was bumped to second, while JPMorgan Chase & Co. improved three spots to take third place. Morgan Stanley slid one spot to fourth, and BofA Securities moved up a rung to crack the top five.
In addition to the main leaderboard, which was weighted by how much voters spent on sell-side commissions, II also produced a set of results weighted by assets under management. UBS topped this ranking as well, moving up from last year’s third place. Citi slid to second, while J.P. Morgan improved on its sixth place to finish third. Last year’s second place finisher, Morgan Stanley, was fourth this year, while Credit Suisse repeated its fifth place finish.
The shakeup mirrors the upheaval experienced in most of Asia over the last year. While U.S.-China trade tensions dominated the markets in 2019, these were summarily replaced in early 2020 by the coronavirus pandemic that engulfed the region and then the globe.
“Where things are today is quite interesting,” said Raymond Chan, head of Asia Pacific advisory sales for UBS. “The Fed in June sent a strong message keeping very low rates well into 2022, and we are in the middle of the world's largest work-from-home experiment due to the pandemic.”
This has far reaching implications, from technology needs and consumer behaviors to accelerating protectionism from countries, Chan said. “Corporations have now woken up to the new world where their supply chains need to be diversified and getting businesses from offshore back home will be a costly but necessary exercise,” he added. “All this resetting will lead to new industry leaders and also investment opportunities.”
It also had sales teams like Chan’s group at UBS adapting during the crisis. But as much as some things have changed since the firm and its clients abruptly began working from home, some core tenets have not.
“The ability to bring market insights and help clients with alpha generation remains core to the advisory sales role and that doesn't change,” Chan said. “What has changed is the medium that connects us with clients. Calls remain the same, but face-to-face meetings with research and sales were not available until restrictions started to ease.”
According to Chan, investment in technologies like video conferencing before the pandemic put UBS in a good position. He reported that the firm’s client interactions are up by more than 30 percent.
Collaboration between sales and research has also increased, according to Chan. “Our global research franchise is core to our service delivery,” he said. “The time saved from fewer global analyst marketing meetings have led to a surge in expert calls, virtual sector tours and many more virtual conferences jointly organized by global research and corporate access. They have been excellent partners delivering interesting companies and experts to our clients.”
As the region looks toward an economic recovery, there are many questions as to when it will happen — and what it may look like. “Extraordinary monetary and fiscal policy and the progression of the virus itself mean there is an unusually wide range of outcomes around our economists’ core view that there’s likely to be an economic recovery in the second half and into 2021,” said Chan. “The opportunities we see remain focused in APAC, which is our core expertise. The ADR homecoming theme, the demand for liquidity, hedging solutions plus the need to understand investor debates for alpha generation will keep us very busy.”
Still, the lasting impact on the sell side and client relationships remains to be seen. “The experience clients now have from digital events means post-Covid our clients will be very selective who they want to meet in person,” Chan predicted. “This makes building relationships more challenging and the sell-side will be competing at a much more intensive level. Those that invest in enhancing the client experience through digital innovation and providing best in class insights will drive differentiation.”