Mixed messages from indie research
Is independent research going up or going down? Whatever, it doesn't pay well.
On one hand, Goldman Sachs looks set to provide Europe's independent equity research sector with a boost. Financial News reports that the US bank is looking to buy stakes in (AKA pump money into) independent research houses in Europe and Asia. It's all part of an effort to capture research fees, what with fund managers now buying research from sources other than the brokers who execute transactions.
On the other hand, however, Financial News reports that Blue Oak Capital, a London-based independent research house, is struggling after losing a swath of senior staff.
So - with Goldman on the prowl, is now nevertheless the moment to go independent? Not if you want to get paid. Zaki Ahmed, a consultant at research-focused headhunter Sammons Associates, says independent houses such as Blue Oak typically pay lead analysts around 60k plus a small bonus - compared to a base of anything from 100k to 150k in banks, plus bonuses of up to seven times salary for such hot sectors as metals and mining, real estate, oil and gas and telecoms.
Independent houses offer lifestyle advantages, however. John Raymond spent ten years at Lehman Brothers before joining US-based research house CreditSights: "It's a lot more flexible, I spend a lot more time working from home," he says.
Raymond says you're better off joining a diversified research house (such as CreditSights) rather than one that just does equities, however: "The equities side is very competitive, the credit side is less so."
