The markets of Emerging Europe, Middle East and Africa can be summed up in a few words, according to Camille Asmar, head of equity sales for Europe and Emerging Markets at HSBC: “Challenging, unexpected in some ways, and volatile.”
Geopolitical events, oil prices, and inflation across the region have been surprising, he said. Inflation is currently at the forefront of clients’ minds as they navigate challenging markets. “Energy markets and economics present many questions as well as opportunities for investors,” he added.
It has been a difficult year for investors in developed Europe as well, according to Dina Geha, global head of distribution at BNP Paribas Exane. “The largest investor pool — U.S. investors — continued to reduce their holdings in Europe,” she said. “Any hope that Europe might finally outperform was dashed by new fears of war, the energy crisis, persistent inflation and the realization that more earnings downgrades were inevitable. The lack of capital markets activity hasn’t helped either.”
Amidst this turbulent landscape, respondents to Institutional Investor’s recent sales team surveys have elevated their tried-and-true providers.
For the sixth year in a row, BNP Paribas Exane is No. 1 in the Developed Europe Sales Team for both generalist and specialist sales teams.
Participants in the broader research survey rated salespeople in each sector on a scale from one to five. For these specialist rankings, II received responses from 1,574 money managers at 705 firms. Jeffries followed BNP Exane in second place, and there was a three-way tie for third among Barclays, JPMorgan Chase & Co., and Morgan Stanley.
Generalist teams were judged on six attributes: adding value to research, global context, idea generation, market knowledge and feel, service and responsiveness, and understanding client needs. BNP Paribas Exane topped each one based on the opinions of more than 1,250 buy-side money managers at 680 firms. BofA Securities followed in second, while JPMorgan took third. Morgan Stanley and Kepler Cheuvreux placed fourth and fifth, respectively.
Each vote was weighted by the respondent firm’s European commission spend. The generalist sales leaders table was calculated by adding together each firm’s overall scores within each attribute to produce a table of the top ten firms.
“Equity sales is at the core of what we do at BNP Paribas Exane,” Geha said. “Whether clients are bundled or unbundled, they are paying for quality of service. Equity sales manages those key decision-making relationships at the CIO, founder, and PM level.”
Geha said her individual team tenure is 15 years. She credits their commitment amid the finalization of the Exane integration into BNP Paribas. “It’s all about our people: They are intellectually curious self-starters who feel a sense of ownership for the business,” she said. “It’s not something we can necessarily teach. It’s simply something we can protect, nurture, motivate and incentivize. I think that is the key to our success. We have a great forward growth story as part of BNP Paribas, while staying true to what made us successful. Finding the balance has helped us stand out once again.”
In the Emerging EMEA Sales Team, it’s HSBC that’s standing out. The firm took the No. 1 spot based on the responses of more than 287 buy-side money managers at 202 firms.
JPMorgan placed second, followed by BofA Securities in third and Morgan Stanley in fourth. Citi rounded out the top five.
Voters recognized HSBC as the best in each of the same attributes as their developed Europe counterparts in the commission-weighted ranking. “Equity sales is the backbone of our global equities offering, bridging markets between the East and West for our corporate and institutional clients globally,” said Asmar. “The sales function at HSBC is more important than ever, given the macroeconomic climate.”
Asmar credited his Emerging EMEA sales team’s consecutive wins to a consistent investment in people, offering, service, and relationships. “All of us around the entire Emerging EMEA franchise globally have built the platform together, hand in hand, brick by brick, for over a decade,” he said. “There is a sense of belonging and always doing our best for our clients — this is always front and center in our minds every day.”
It is a platform also built for scale, according to Asmar. Important since the strength of investor demand for Middle Eastern equities was also surprising this year and he only expects more Middle Eastern markets to open up further with increasing international investor interest. “I always knew it was in the offing — it was merely a matter of time — but not to the level we have seen thus far,” he said.
In developed Europe, performance disparity will impact asset raising this year and beyond, according to Geha. “Many directional hedge funds are down significantly and are now in business preservation mode,” she said. “On the other hand, the large multi-strategy structures are printing solid numbers, raising assets and hiring aggressively. This is resulting in big staff movements for the buy-side — something we haven’t really seen since the pandemic.”
The market backdrop is not easy either, and getting the macro right has proven difficult this year. “Many investors are sitting on the sidelines with low exposure looking for the right entry point back into the market,” Geha added.
And while the sell-side in Europe has been disrupted by major players exiting in recent years, this means that the winners have a huge opportunity to take market share. “BNP Paribas’ commitment to equities should ensure the bank is best placed. Data analysis which generates alpha will continue to be a big opportunity for both the sell-side and clients,” Geha said. “And finally, timing will be key as we look at the light at the end of the tunnel for European equities.”