If you work in equity research now, it pays to join a specialist firm where analysts are given elevated status. However, would you quit Goldman Sachs just a year into your banking career to join a smaller research-focused firm?
Alexandruo-Cristian Dirpes has done just this. He recently moved across to Berenberg from Goldman Sachs, where he was an equity research analyst. Dirpes joined Goldman Sachs full-time in July last year after 12 months on a placement year at the bank. He joined Berenberg as an equity research analyst earlier this month.
Berenberg has been indulging in "counter-cyclical" hiring for the past two years and has been bringing in some senior research analysts as other investment banks pare back in this area. It is planning to increase its current team of around 100 analysts in the UK and U.S. to around 150 people.
Dirpes is the second research analyst to leave Goldman Sachs for Berenberg in recent months. Conrad Bartos, an analyst who’d spent three years at Goldman Sachs since joining from University College London in 2012, made the switch from IBD to research at Berenberg.
At large investment banks, meanwhile, most firms have continued to hire senior analysts in the build up to MiFID II's implementation in 2018. MiFID II requires banks to separate research costs from other trading commission charges, so the logic is that senior analysts writing high-quality research is more likely to lead buy-side clients to shell out.
But generally large banks have been pulling back from equity research. A study by Edison Investment Research and Frost Consulting suggested the budgets for banks’ equity research teams have fallen by 50% since 2015 as a result of MiFID II.
The structure of most banks' teams has therefore shifted towards juniorisation - a few star analysts supported by a team of juniors. Whether this works out well for juniors starting out in equity research is still up for debate. It may be better, therefore, to leave a large firm for a specialist early on.
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