Around this time last year, Chintan Joshi was co-heading Nomura’s banks equity research unit. After the bank closed its cash equities business in April 2016 he joined Mediobanca for a brief eight-month stint. Now, after three months out, he’s leapt across to the buy-side.
Joshi is now senior equity analyst at Abaco Asset Management, a $1bn hedge fund that primarily invests in European financial stocks. This is his sweet spot – he previously co-headed the banks research within Nomura’s now defunct European equity research team, and led its coverage of UK banks.
As we reported previously, after Nomura’s sudden closure of its European cash equities business, Joshi landed a role as an equity researcher on UK and European banks at Mediobanca, but the role lasted just 8 months. Before this, he spent close to eight years at the Japanese bank, having moved across from Lehman Brothers following Nomura’s acquisition of its European business in the immediate aftermath of the 2008 financial crisis.
Abaco is a small outfit in the UK – it has just six employees registered with the Financial Conduct Authority. It paid its investment management staff £4.4m, according to the Pillar 3 disclosure in its 2016 accounts released in April. Its highest paid partner received £1.2m.
As well as Joshi, Abaco hired Gary Lee, an analyst at KBW focused on UK insurance, as an analyst in June.
Joshi is one of the few highly-regarded analysts within Nomura’s disbanded equity research team to make the move to the buy-side.
Jon Peace, the other co-head of equity research at Nomura, joined Credit Suisse as a managing director covering investment banks and French banks. David Hayes, who focused on consumer goods at Nomura, joined Bank of America Merrill Lynch as a managing director.
Joshi’s move across to the buy-side may prove to be wise. Investment banks are under increasing pressure to improve their research output as MiFID II regulation requires them to ‘unbundle’ costs from other trading charges.
Most banks have been willing to hire top-ranked analysts – although this status is no guarantee of employability – and recent studies suggest that maintaining large research teams covering multiple sectors is increasingly unsustainable.
Quinlan Associates, the consultancy set up by the former head of equities strategy for Asia-Pacific Benjamin Quinlan, released research last week suggesting that large investment banks’ research teams could lose $240m by 2020, and that it would be increasingly difficult to justify maintaining large in-house teams.
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