How MiFiD II inspired Exane to build a top equity research team

Equity researchers want to work for Exane BNP Paribas. They want to work for Exane BNP Paribas so, so much that the French bank's London head of research Ben Spruntulis and his deputy Nick Webb receive at least one CV every day. "We get all sorts applying," says Spruntules. "It's seasonal and sometimes we get more CVs than others, but barely a day goes by an analyst doesn't get in touch."

Exane's appeal is twofold. Firstly, it's hiring. Secondly, it lets equity analysts do the sorts of work they really like to do.

The business has just added five new senior researchers in London. They are: Theepan Jothilingam a top ranked oil and gas analyst, who joins from Nomura as head of oil and gas research; Sarah Deans, a top ranked accounting and valuation researcher, who joins from Citi as head of a new accounting and valuation team; Rob Joynson and James Hollins; who join as senior transport analysts from Nomura, San Dhillon, a senior telecoms analyst who joins from RBC; and Andrew Gwynn, a senior food researcher who rejoins from UBS. 

While MiFID II might be encouraging some banks to cut back on equity researchers, the opposite is happening at Exane. "Our belief is that you need to have a high quality, content-driven business where every sector is covered by a highly-ranked team," says Spruntules. "The importance of being a thought leader is going up and up and MiFiD II is just adding to that. It says to clients that if they're paying the sellside for advice, it needs to be of the highest quality."

Exane BNP Paribas ranked second overall in the recent Extel survey and had 25 teams ranked in the top five. As well as the calibre of their researchers, Spruntulis and Webb attribute the bank's success to a team of eight full time "quality control specialists" who review every piece of research from an accounting and valuation perspective. Most equity research teams have their work reviewed by supervisory analysts, but Webb says Exane's team takes this one step further: "Our quality control team are all ex-analysts and they look at every piece of research to ensure the integrity of the data, that we're approaching valuations consistently, and that any changes we make are done in a thoughtful manner."

While some have banks focused on quick and dirty desk research which traders can use on a daily basis, Exane's focus has always been on longer, more studied pieces. "What we're interested in is high quality, thematic research based upon high quality data," says Spruntulis. "We pride ourselves upon this."

This in itself is an attraction for equity researchers who want to really get behind a sector, and helps explain the constant flow of experienced CVs.

Exane isn't just about hiring high achievers from elsewhere though: it also trains up a select group (fewer than 10) of graduates every year and has around 25 junior associates at any one time. "We have our own homegrown Exane top-ranked analysts," says Spruntulis.

After its most recent bout of hiring, Exane is letting things settle. Folllowing a long period of "gradual but significant growth", Spruntulis says they are, "where we want to be" in terms of numbers, although he adds that they will avail themselves of "opportunities to hire graduate analysts" if those analysts become available.

You can still get a job at Exane, therefore, but you'll need to be special. One thing's fairly certain: there are unlikely to be many gaps from people leaving. "The last analyst who left for a sell-side competitor was Andrew Gwynn," says Spruntulis. "He joined UBS for 18 months and has just come back again."