Industry Knowledge - Coverage Group vs Research
hey gurus. When a coverage group is going to pitch an idea to a company, I would assume that the bankers know a lot about the industry. So, when it comes to industry knowledge, do people in research (who are dedicated in a specific industry obviously) know more than the bankers. Is there a little overlap in the function of these two groups?
Regardless of who knows more, research can not work with bankers and vice versa, it's the Chinese Wall in the bank. They both do know an industry pretty well, especially the higher up and more niche senior bankers become. I don't know much about research, but I would say they definitely know more about the companies they cover than their banker counterparts.
research probably knows more about the industry. They have to dive into heavy detail in their models and are writing pretty in depth reports on a regular basis.
While visiting a BB energy group yesterday, someone asked a similar question to an associate. This issue is especially pertinent in energy given the technical nature of e&p, refining, etc (v. retail where i think we all understand selling x # of shirts). Basically, the guy said he just takes a couple of hours to grind through 10k's and research reports to get up to speed. Sometimes they will call research to speak in generalities but you have to be careful about such contact for compliance reasons (chinese wall and all of that).
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