< The 2016 All-Europe Research Team
Michael Bessell & team
Bank of America Merrill Lynch
First-place appearances: 10
Total appearances: 20
Team debut: 1992
Michael Bessell and his Bank of America Merrill Lynch teammate capture third place, marking the firm’s first appearance on this roster since 2013, the year longtime leader Bernd Stahli left for Kempen & Co. (which earns a runner-up position this year). Bessell, 38, signed on with BofA Merrill that July, having previously covered U.K. property companies at Evolution Securities and managed a U.K. equity portfolio at Standard Life Investments. He holds joint bachelor’s and master’s degrees in financial economics from Scotland’s University of St Andrews. The analysts see a mix of opportunity and adversity on the horizon. “We believe that the fundamentals for the U.K. and European property sectors are currently robust,” says Bessel. “The quest for yield investments continues to drive increasing asset allocations to real estate, and this at least underpins capitalization rates and in some cases is driving further compression. In addition, certain sectors and geographies, such as prime shopping centers, are seeing rental growth, which is driving valuations forward.” Accordingly, the London-based researchers’ favorite names include French commercial property owner Unibail-Rodamco and two British investment and development companies, Derwent London and Segro. Still, Bessell cautions, “the challenge for the listed property sector is that sentiment remains sensitive to macroeconomic uncertainty, and this is driving volatility in share prices. As we go into 2016, there are conflicting macroeconomic pressures on the real estate sector in the form of U.S. and U.K. interest rate rises while the [European Central Bank], among others, continues quantitative easing. As such,” he concludes, “we expect share price volatility to continue to reflect this uncertainty in the shorter term, despite the robust and even improving fundamentals.”
