Current Impressions of Sell-Side ER Shops

nutella's picture
Rank: Baboon | 106

Hi everyone. I'm a first-year MBA going after ER roles for the summer and I'd love to get some current info on the various sell-side shops. I have read everything there is on this site and most is stale. Please jump in with whatever you know. I'll start:

In no particular order:

1. JP Morgan - Seems like the best BB ER group overall, definitely invests a lot in the division and people seem happy, good comp etc.

2. Morgan Stanley - I have also heard good things from former MS people but have less information to go on.

3. GS - Awful working environment but the comp is good. Don't even hire MBA interns so not on my list.

4. BAML - Highly ranked, but just heard that there was a mass exodus at the junior level (~40 or so, I think mostly associates) due to perceptions of being underpaid. Would love confirmation of this.

5. Barcap - Employees seem extremely happy, good comp. Research seems to be a strong focus for the firm as a whole, big emphasis on promoting people to covering their own names.

6. UBS - Was told to avoid at all costs. Have to give guaranteed bonuses to anyone high-level to get them to come to UBS and this leaves nothing for Associate bonuses. Almost literally nothing.

7. Sanford Bernstein - From what I've heard, the best of the independent shops. Close to zero promotions to full analyst so virtually everyone who comes in as a post-MBA associate exits to the buy side, and SB strongly encourages this to build their customer base. Research is definitely well differentiated, much more detailed and they cover fewer stocks.

8. RBC - Any impressions?


Comments (21)

Dec 10, 2013

Two cents: I would expect that at MM shops or boutiques, recruiting is structured so that someone is hired when an Associate leaves. Thus, your culture/lifestyle will be dependent on the Analyst you are working for.

Dec 10, 2013

As someone working as a research associate for a boutique, I can affirm this.

Dec 10, 2013

Who you work for matters more than anything else because ultimately each analyst is running his own little mini-business. They will impact your quality of life far more than the firm culture with a few exceptions.

Dec 11, 2013

Yes, I have heard that. But there are plenty of firm-specific differences as well.

For instance:
Compensation (varies quite a bit between firms from what I've heard)
Quality of people at junior/senior levels
% of ranked analysts
Headcount trends
Career progression (do they promote from within?)

Would love to hear about any of those or anything really. I'm talking to a few people at these places but the more info the better.

Dec 11, 2013

as the above said, who you work for is a lot more important than what firm you work for- some senior analysts are great, others are jerks

I would be skeptical that there was a mass exodus of Merrill junior people. Where would they go? Hedge funds haven't been hiring much the past few years and it's unclear whether sell-side equity research is still a good path for doing equity L/S (my sense is that an IB analyst stint and then moving to HFs is a better bet). I don't think mutual funds are hiring much either. Typically sell-side people bounce from one bank to another every few years.

The sell-side market is really small, both in supply (people who have ER experience) but also demand- very few spots created every year on the street. The FT offer rate in ER, even at a place like Barclays is probably below 50%.

I think your perception of UBS is way off the mark. They have traditionally had a great franchise in terms of IB and markets (pre-crisis) and are still a top BB in Europe and Asia. If management wants to, they will rebuild the U.S. franchise- they have strong capital reserves and probably the world's premier private bank.

Learn More

Side-by-side comparison of top modeling training courses + exclusive discount through WSO here.

Dec 11, 2013

Personal Prospective from the Buyside:
JPM-Cut and dry reports you can read quickly but as such lack detailed explanations, hope you can get the analyst on the phone if you have a question.
MS & BAML- I like the format and length of the reports, definitely have some talented analysts and as a bonus you have a good shot of getting one on the phone.
Sanford- Very in depth reports and lots of them, less need to reach out to the authors because the reports are encompassing.

No Deutsche Bank? Their research is also pretty solid.

No idea about working at any of these places lol and it should be noted that if you move enough weight you will be able to speak with the analyst.

Dec 11, 2013

In terms of research quality I feel like Sanford Bernstein wins #1 no? Its the pay/promotion to analyst opportunity that bring it down..

Dec 12, 2013

Why do people mention the promotion cap as that big of a negative given that most leave after 2-3 years anyway?

Dec 12, 2013

The transition from Associate to Analyst in ER is quite difficult, and can take a short or an extended period of time (7-10+ years, or never). If there are structured opportunities to advance more quickly, it can boost your career ahead. Also, being able to analyze your own coverage universe is more interesting, as they are your own ideas. It's annoying having to catch up on someone else's stock pick, and essentially do the bitchwork for it.

Dec 12, 2013

That's why people in ER who wish to have a career on the sell-side hop around from firm to firm a little bit as it is very rare to become the Analyst at the same place you've started. Often you're still viewed as that junior associate that couldn't get his/her head round a VLOOKUP.

Dec 12, 2013

Hedge fund are hiring. I've seen plenty of new L/S Equity shops in NYC that are bringing in assets left and right thanks to the bull market.

Dec 12, 2013

I don't really view Sanford's no-promotion policy as a negative.. it just means they do a better job of transitioning you to the buy side. Their research is so well respected that it's a pretty easy sell. Also is comp there below market? I was under the impression that they paid roughly the same as BB firms but I don't recall what info I had.

I haven't focused on DB/Citi because they don't take interns, but info on them would probably be useful to others.

Dec 12, 2013

Comp at Sanford is easily in line with BBs.

Dec 12, 2013

I'd be interested to hear any opinions/thoughts on RBC. Know a few guys there in S&T, and from what they say it seems like a good place, but don't know much about ER.

Dec 13, 2013