Equity research is not a good place to be in Europe now. With MiFID II forcing buy-side firms to pay separately for research, minds are being focused on how much is being spent on unread research reports. In future, far fewer researchers will be required and research jobs are already drying up. Our own figures suggest there have been 60% fewer research jobs on offer in London in March and April 2017 than one year earlier.
If you can get out of equity research in an investment bank, therefore, you may want to. Especially if you can get get into the buy-side. One thirty-something BAML researcher has done just that. Even better, he's turned up at a leading hedge fund.
Fabio Lopes just joined hedge fund Millennium Management as an equity analyst. Two years ago, he was grinding away as an equity researcher covering the papers, chemicals and agriculture sector at BAML. Other equity researchers may well look on in envy, so how did Lopes do it?
First, he went to Citadel. Not Citadel Securities - which has been hiring all sorts of people in London, but Citadel LLC, the hedge fund. He stayed there for 21 months before going to Millennium, which has been selectively hiring top equity researchers for the last three years.
Jason Kennedy, a headhunter with Kennedy Group in London, says researchers who want to move to a hedge fund should do so early in their careers: "The longer you stay in a bank, the more you're going to be out-priced in terms of what you can do for a hedge fund."
On the whole, Kennedy says it's easier for fixed income researchers to move to hedge funds than it is for equity researchers. "The fixed income guys can rip the balance sheet apart and tell you with a company is cheap from a fundamental point of view. The equity guys are all about telling a story and selling the stock. If you're investing, fixed income researchers are more helpful."
Maybe Lopes got lucky then? He was at BAML for nearly six years. Now he's "safe" at Millennium - although with Millennium's reputation for churning staff, some might argue that he's anything but.