From Institutional Investor’s All-America Research Team
Stock picking is back in vogue again — and it’s showing just how good research providers really are.
“Last year saw the end of an incredibly long period of free money. In an environment when almost everything goes up, stock-picking is easy, and as a consequence, research isn’t terribly highly valued,” said Craig Moffett, senior managing director at SVB MoffettNathanson. “But when the calendar page turned in January, to paraphrase Warren Buffett, we found out that there were a lot of people swimming naked. Suddenly, stock picking was hard again.”
As the tides changed, institutional investors looked to their favorite independent research providers for help.
MoffettNathanson ranked No. 1 in Institutional Investor’s 2022 ranking of Independent Research Providers. The ranking — a subset of the All-America Research Team — was based on a survey of buy-side investors, who were asked to rate research providers that operate without the backing of an investment bank.
Second place overall went to Renaissance Macro Research, followed by 22Vresearch in third.
Dennis Debusschere, who left Evercore ISI to launch 22Vresearch in 2021, credited his new firm’s success to a “process-oriented approach” to research.
“All of our analysts either have buyside experience or are experts in their respective areas,” he said. “We spend an unusual amount of time trying to help clients understand the practical investment implications of our research.”
For 22V — which placed first in the overall macro category — that includes helping clients manage risk in the current economic environment.
“Making a call that on where the S&P is going to end the year is just the start,” Debusschere said. “Investors want to know how to manage factor and sector volatility over the course of a year.”
At MoffettNathanson, the research team observed a similar demand from clients as markets began to turn.
“A higher cost of capital demands a much more rigorous evaluation of the returns that covered companies generate, and a much more serious analysis of the kinds of returns they will be able to generate in the future,” Moffett said. “Our clients caught on almost immediately; we were only days into January and you could almost feel the sea change in the seriousness of the questions our clients were asking. That worked in favor of firms that have always been dedicated to serious research.”
Moffett calls MoffettNathanson a “research-first firm,” highlighting its origins as a partnership of two “deeply passionate” analysts with “three like-minded sales professionals.” Those origins were recognized by buy-side voters, who ranked MoffettNathanson first in the technology, media, and telecommunications category — the sector that Moffett and his co-founder Michael Nathanson have long covered.
Since December 2021, MoffettNathanson has been owned by SVB Financial Group, the parent of Silicon Valley Bank. Moffett said the deal has allowed the firm to hire “remarkably talented analysts” including software specialists Sterling Auty and Jackson Ader and e-commerce analyst Mike Morton. The firm has also recently promoted video games analyst Clay Griffin and fintech specialist Eugene Simuni to publishing roles.
“Those additions make us immeasurably stronger; it’s not just that they expand our breadth; they make all of us smarter,” Moffett said “All of us work together to understand the shifting sands of the broader technology, media, and telecommunications ecosystem. The relationships that SVB brings in the innovation economy are the final piece of the puzzle. I’ve never been more excited about the insight and opportunity we’ll be able to deliver to our clients.”
