Even the best investment research is of little value if it doesn’t make its way into the hands of clients. The task of delivering research in a timely manner — plus answering logistical questions and arranging meetings between investors and corporate executives — generally is directed by a firm’s sales force.
Which bank’s sales team outperforms all others when it comes to meeting the myriad needs of research customers? To find out, Institutional Investor asked participants in the 2011 Latin America Research Team survey to tell us which firm fields the best overall sales team. In a very close contest, with less than 1 percentage point separating the top four firms, Itaú BBA wins the pole position on the Latin America Sales Team, followed by Morgan Stanley in second place, BofA Merrill Lynch Global Research in third and Credit Suisse in fourth. Results are based on responses from 527 buy-side analysts and money managers at approximately 320 firms that collectively manage some $409 billion in Latin American assets. Roughly 80 percent of the people who cast votes in the Latin America Research Team survey, representing 88 percent of the participating buy-side institutions, answered our question about the best sales team in the region.
Three firms — BofA, Itaú and Morgan Stanley — appear in the top five in each ranking. Portfolio managers credit J.P. Morgan with providing the best Latin American equities and fixed-income research, but the firm tumbles to No. 7 in sales. BofA ties for second in research and takes third in sales; Morgan Stanley is No. 2 on both teams. The full list of winning firms on the Latin America Sales Team appears on the right.
“Clients are looking for in-depth equity research, for angles that show a deep understanding of companies and insights into potential drivers of earnings growth or multiple expansion,” explains Adam Cherry, Itaú’s New York–based head of equity sales for institutional investors in North America. (The firm also has a team based in London, led by Mark Fenton, that serves clients in Europe, the Middle East and Asia, and a squad headquartered in São Paulo, directed by Carlos Maggioli, serving customers across Latin America.) “They are particularly complimentary on Itaú’s local edge in our research and sales calls.”
Indeed they are. “Itaú BBA’s sales teams led by Carlos Maggioli in São Paulo and Adam Cherry in New York combine very strong local content — being Brazil’s most active bank and broker — with the global reach of its New York and London desks,” observes one client. “Being a Brazil-based portfolio manager, I manage to get a sense of what global investors are thinking. Also, they can process vast amounts of information and tailor it to my needs — definitely a top sales team for a top research group.”
One U.S.-based hedge fund manager agrees. “Itaú BBA has become one of the institutions that we consider to be a go-to,” he says. “Their sales coverage is second to none, with a team environment whereby there is coverage even when the main person is out of the office.”
Morgan Stanley clients are similarly enthusiastic about that firm’s sales team. “They respond promptly to any request I send their way,” applauds one Brazil-based portfolio manager. “Be it a meeting with an analyst or a company, they always get it done very quickly.”
Dario Lizzano, Morgan Stanley’s New York–based head of research and sales for Latin America, oversees offices around the globe to meet the needs of clients who invest in the region. “In equities we have 14 salespeople fully dedicated to Latin America — five in New York, three in London, two in Mexico and four in Brazil,” he says. The firm also has a three-person equity derivatives sales team based in São Paulo, he adds.
“Clients first and foremost need to get great investment ideas based on solid fundamental research,” Lizzano says. “They need salespeople to understand their needs and investment profiles, as well as somebody who can put the broker resources at the service of the client. In addition, they need somebody who can help them understand how global fundamentals will affect countries, markets, sectors and companies in Latin America. Morgan Stanley’s strategy in the region is to complement our strong global franchise with a very strong local presence.”
Credit Suisse follows a similar strategy. The firm’s brokerage, research, sales and trading operations are clustered under one management group co-directed by Emerson Leite (research) and Edward Weaver (sales), both of whom are headquartered in São Paulo. The ten-member sales team consists of four representatives who serve clients in the U.S. and three each serving clients in Europe and Latin America, Weaver says. “We also have a dedicated LatAm equity derivatives force of two people based in São Paulo,” he adds.
Clients are impressed. “The person in charge of our account sends us a daily e-mail in which he summarizes not only the main points of the day but also all the research that came out that day and the day before,” explains one Brazil-based fund manager. “This is very helpful as it reduces the time we spend going through reports, reading only those that really add value to our investment decision making.”
The firm’s sales force goes beyond delivering research and funneling questions to and answers from analysts. “Credit Suisse has been organizing multiple collective meetings with company managements — breakfasts, lunches — and one-on-one conferences,” says one money manager. “They are always helpful.”
Picking the Team
To select the members of Institutional Investor’s inaugural Latin America Sales Team, we invited participants in the 2011 Latin America Research Team survey to name up to four firms that they feel have the best sales teams in the region.
We received responses from more than 520 buy-side analysts and money managers at approximately 320 firms that collectively manage some $409 billion in Latin American assets. Roughly 80 percent of the people who cast votes in the research team survey, representing 88 percent of the participating buy-side institutions, answered our question about the best sales teams.
We weighted votes by a respondent’s Latin American equity assets under management and by the place awarded (first through fourth). The names of those surveyed and the institutions they work for are kept confidential to ensure their continuing cooperation. Voters are required to meet eligibility requirements, and all ballots are subject to review. The 2011 Latin America Sales Team was compiled by Senior Editor Tucker Ewing, Associate Editor Denise Hoguet and São Paulo–based Researcher Milena Mazzola Moreti, under the guidance of Managing Editor Thomas W. Johnson.
