Equity research leaking talent

The equity research sector is suffering a dearth of talent.

Noel Marshall, managing director of the banking and financial markets division at search firm Finance Professionals says the best researchers are leaving banks: "There is a shortage of the big names, the good stars at banks. The good analysts are going off to hedge funds, and the ones that are left are not the cream of the crop."

As well as a brain drain, Marshall says banks are also struggling with the question of what equity research is worth, and are having trouble attracting the best candidates.

"On the whole, equity research departments in banks have not had the pick of candidates they would have had when equity research was sexy. Now the best young graduates, analysts and MBA's would rather start their careers in other areas of the bank like M&A and corporate finance."

The Financial Times today quotes the head of a small broker, who says investment banks are not providing adequate investments into the training of equity research analysts, and that those in a position to teach have either retired or gone to hedge funds.