From geopolitical instability to market uncertainties, U.S. investors had no shortage of hurdles to navigate this year.
“The past year has been a clear transition for the U.S. markets,” said Nick Savone, global head of institutional equities sales at Morgan Stanley. “From the post-Covid lows the predominant themes revolved around secular winners [and] losers, growth, and capital markets. At the end of 2021, this began to shift as focus turned towards more macro related topics like Fed rate hikes, globalization and geopolitical instability. Given these drivers, investors have had to reconsider strongly held beliefs on sectors and risk exposure.”
Fortunately, a number of top equity sales teams were ready to help investors connect the dots. “Although it has been a tricky year to navigate, our ability to leverage experts across Morgan Stanley to provide timely insights has helped us connect with clients in a deeper way when it truly matters,” Savone said.
Voters of Institutional Investor’s 2022 All-America Sales Team appear to agree. Morgan Stanley has once again topped the annual ranking of Wall Street’s best sales professionals in both the generalist and specialist categories. JPMorgan Chase & Co. took No. 2 in the main leaderboard for generalist sales; followed by BofA Securities at third. The main ranking was weighted by the voting firms’ commission spending, with a secondary list based on the firms’ assets under management.
In the specialist category, BofA placed second and UBS took third.
“We continue to view the sales role as uniquely positioned to deliver the whole firm to our clients,” Savone said. “Our team is product agnostic and the goal is to deliver the most impactful resources to drive outcomes. In a market that is shifting rapidly the ability to pivot our offering has been key, so having an experienced team has certainly paid dividends.”
To compile the ranking, voters were asked to rate firms across six performance attributes: adding value to research; global context; idea generation; market knowledge and feel; service and responsiveness; and understanding client needs. Morgan Stanley topped each metric, except for idea generation, which went to BofA. For specialist sales, voters could rate up to seven firms in the eight sectors.
“Factors across geopolitics, fiscal policy, and the corporate landscape have created a unique investing dynamic in the U.S. and globally,” said Bernal Vargas, head of U.S. cash distribution for JPMorgan. “With this as the backdrop, this year it was even more important that our sales team partner closely with our investor clients to deliver on the most critical components of their investment process. We believe consistency and continuity of coverage in an environment like this is paramount, and we are extremely proud to have been able to deliver this high level of service to our clients throughout the year.”
BofA credits landing in the top three to the integration of teams across sales. “It’s a comprehensive solution for clients — intense focus and collaboration across generalist, specialist, and international salespeople to seamlessly deliver the breadth of the BofA platform,” said Steven Fogarty, head of New York advisory sales at the firm. “It is the most cohesive effort that I’ve seen in my 20-plus years at BofA.”
Differentiating an equity sales team in this environment is all about “people and content,” according to Fogarty. “I try to instill upon our sales teams the principles I grew up with: client focus, teamwork, integrity, respect for the individual and responsible citizenship,” he said. “Our clients need to know day after day we are fully committed to their success.”
Amid the tumultuous markets, Morgan Stanley’s Savone notes this year has brought several surprises. “The magnitude of rate increases as well as the Fed transitioning from a transitory view to a more well-defined view in thwarting inflation has been the big surprise,” he said. “Outside of the overall shift in market sentiment and macro concerns, the biggest surprise has to be the dramatic decline in the overall deployment of capital, whether it be M&A, new equity, credit issuance or buybacks. The lack of conviction has been pervasive. Although most market participants were anticipating a slowdown the magnitude was clearly a surprise.”
But opportunities for the buy-side and their top sales firms remain. “The biggest opportunity that we see is balancing the near-term shift in market dynamics and what that means for portfolios with long-term strategic initiatives like macro geopolitical drivers, data, ESG, and a global view,” Savone said. “The world is becoming increasingly complex and having the wherewithal to continue to invest in an uncertain market environment should lead to continued differentiation.”
