A former Citigroup analyst who quit the industry in April has topped a closely-watched ranking of investment banks’ researchers in Europe, highlighting the challenges banks face keeping hold of top talent as investors have cut back their research spend in the wake of sweeping regulation.
Mark Manduca, who worked at Citigroup covering the transport sector, left the bank in April to join XPO Logistics as its chief investment officer. He was voted the best analyst in developed Europe for the second year running by fund managers in the Institutional Investor rankings, known in the industry as the ‘City Oscars’.
He was followed by Jeff Stent at Exane BNP Paribas, who covers consumer products. Mislav Matejka, head of global and European equity strategy at JPMorgan, was in third position.
Many banks have cut back their analyst teams after the implementation of the second iteration of the Markets in Financial Instruments Directive in 2018, which requires them to charge fund management clients for research separately from other trading charges. But top-ranked analysts have been hired at a premium as banks compete for fund management clients amid shrinking research budgets.
Since MiFID II came into force, European fund managers have cut between 52-75% of their spend on research, according to Frost Consulting, and the number of banks they use for research by between 20-70%.
This year’s II rankings have also seen a change in the running order of top banks for research. Exane BNP Paribas beat larger investment banks to finish in the top spot. Bank of America jumped into second place, ahead of UBS, which was first alongside Exane last year. JPMorgan dropped from third to fourth, while Citigroup fell from third position to sixth. Morgan Stanley was ranked fifth.
Institutional Investor, which acquired rival Extel in 2018, gauged the opinions of 4,226 portfolio managers and analysts from 1,468 institutions for the rankings.
In the UK, HSBC was ranked the top investment bank covering large-cap stocks, followed by Berenberg. Peel Hunt was the top-ranked firm covering small and mid-cap stocks, with Investec in second place ahead of Numis in third.
Most of the banks to make it to the top of the league tables have maintained the largest research teams in the region, with some even expanding their teams in the region as rivals have cut back, according to specialist recruiters.
The top 20 research analysts in developed Europe:
1. Mark Manduca, Citi
2. Jeff Stent, Exane BNP Paribas
3. Mislav Matejka, JPMorgan
4. Warren Ackerman, Barclays
5. Celine Pannuti, JPMorgan
6. Cedric Besnard, Citi
7. Graham Secker, Morgan Stanley
8. Dennis Jose, Exane BNP Paribas
9. Martin Deboo, Jefferies
10. Haim Israel, BofA Securities
11. Andreas Willi, JPMorgan
12. Elodie Rall, JPMorgan
13. Pinar Ergun, Morgan Stanley
14. Michael Hartnett, BofA Securities
15. Sebastian Raedler, BofA Securities
16. Guillaume Delmas, UBS
17. Ed Mundy, Jefferies
18. Jerome Ramel, Exane BNP Paribas
19. Edouard Aubin, Morgan Stanley
20. Jose Asumendi, JPMorgan
Top ten investment banks for developed Europe research (2020 position in brackets)
1. (1) Exane BNP Paribas
2. (5) BofA Securities
3. (1) UBS
4. (3) JPMorgan
5. (6) Morgan Stanley
6. (3) Citi
7. (11) Credit Suisse
8. (7) Barclays
9. (12) Jefferies
10. (8) Kepler Cheuvreux
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