COVID-19 can never be called a positive, but if you work in equity research the pandemic has had its upsides. - After years of sacrifice at the altar of MiFID II, equity researchers are back in fashion again.
Goldman Sachs COO John Waldron highlighted research teams' reinvigoration in his presentation last week. While the virus ravaged markets, Goldman provided 740+ webcasts for 240,000 particpants, said Waldron. Goldman achieved a 90% increase in its "research leadership" over the same period. Research teams at Citi, Berenberg and Morgan Stanley have reported similarly impressive levels of research engagement during the pandemic.
This COVID-boost might be one reason why both UBS and BofA have made recent research hires. Bank of America hired Thomas Thornton from Jefferies to be its New York-based head of global research product marketing, starting in May. UBS hired Kate Somerville from RBC to be a London-based director in equity research, starting this June.
Zaki Ahmed, director of Financial Search Limited, a boutique that focuses on placing researchers in London, says equity researchers are unquestionably back in fashion. "There is record research engagement and output," says Ahmed. "Sell-side researchers are finally getting respect from the buy-side, which tends to happen during a crisis."
It helps, too that researchers have thrived while working from home. Roadshows that used to involve weeks of arduous travelling have now gone online and researchers in home offices are better able to focus on written output. Anecdotally, call times with clients have increased - along with researchers' fees.
Even so, Ahmed says there's not much sign of extra hiring - yet. Thornton and Somerville may well have finalized their moves before the pandemic. This could change as 2020 progresses. "I anticipate a wave of hiring and upgrades in research on the sell-side in the last quarter," says Ahmed.
However, this could be contingent on people being back in the office and hires happening after face to face interviews. Although clients are perfectly happy to attend remote shows, banks remain reluctant to recruit researchers entirely through Zoom, Ahmed adds.
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