Research departments continue to expand at the top banks, unfazed by the recent spate of job cut news on Wall Street. Equities remain the biggest growth area, with firms hiring in sectors such as life sciences, health care, and biotech. Another prime target is Asia as banks such as Barclay's build their coverage in the region.
The hiring isn't limited to foreign banks, however, as Wells Fargo, Wachovia and Jefferies recently expanded their equities research groups. Earlier this summer, Jefferies brought on eight new people for equities research in the U.S. and Europe, including areas such as energy. While hiring in energy helped plug a gap in coverage, other areas, like health care, have helped the firm expand its banking capabilities, and in the process helped win over existing equities clients. (Jefferies has also increased its equities sales team in the U.S.)
Meanwhile, Wells Fargo is expanding its food and beverage coverage, while Wachovia builds its life sciences and European groups.
"Research continues to grow in firms where there is a tie-in to banking," says Michael Karp of the Options Group. Karp says that firms such as Nomura are also building and increasing their research capacities.
At the same time, UBS and Barclay's are jockeying for leadership in Japan and the Asia-Pacific region. In Japan, UBS recently poached Naomi Takagi, a top food and beverage analyst from JPMorgan. UBS is looking to build out its team in the "next few weeks," according to Damien Horth, head of Asia and Japan equity research.
For its part, Barclay's continues to expand its Asian equity research group. After luring Tom Quarmby and Jon Windham from Macquarie Securities, it is seeking to fill out additional research positions.
Karp says that even hedge funds are beginning to selectively add research analysts. "On the equities side, high-ranked analysts will always be in demand," he says.