For investors, 2023 meant keeping their eye on the macro — without losing sight of the micro.
“Clearly macro drove many of the challenges for equity markets,” according to Nick Savone, global head of equity sales at Morgan Stanley. “The manifestation of higher rates and the impact on equity valuations and earnings growth has been the overarching hurdle for investors to grapple with.”
But microeconomic themes around artificial intelligence and a class of weight loss drugs known as GLP-1s, also created opportunities and posed threats to portfolios. “Our team at Morgan Stanley has sought to help clients navigate all these challenges leveraging our resources across corporate access, research and our broader equity offering,” he added.
Respondents to Institutional Investor’s 2023 All-America Sales Team survey have once again recognized the firm’s efforts. In a repeat performance, Morgan Stanley has topped the annual ranking of Wall Street’s best sales professionals in both the generalist and specialist categories.
Investors remained loyal to previous top sales teams, and there was very little movement among the firms down the leaderboard. JPMorgan Chase repeated its second-place finish in the main leaderboard for generalist sales, followed by BofA Securities in third place. Jefferies and Goldman Sachs swapped spots to take fourth and fifth, respectively.
This held true for the specialist leaderboard as well. BofA Securities was once again the runner-up followed by UBS and Jefferies in third and fourth place. Goldman Sachs cracked the top-five this year after finishing sixth in 2022.
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. For specialist sales, voters could rate firms in the eight sectors. BofA Securities captured three of those, followed by Morgan Stanley with two. Evercore ISI, Keefe, Bruyette & Woods, and UBS were each recognized for one sector.
How did the impact of another especially challenging macroeconomic year affect U.S. equity sales? “The salesforce had to be well equipped with fluency across asset classes as balance sheet questions became a key focus for investors in this higher rate environment,” said Erika Kingetsu, co-head of Americas equity sales at Morgan Stanley. “In partnership with research, as well as our cross-asset team, credit and bond maturities became part of the equity vernacular. Morgan Stanley also benefitted from a truly global sales force as investors navigate the degree of China’s stimulus to overarching geopolitical risks that continue to impact global supply chains and commodities.”
Bernal Vargas, head of U.S. cash equity distribution at JPMorgan, added that fiscal policy, the health of the consumer, and an extremely complex geopolitical landscape all created challenges in 2023. “Our sales team continued to partner closely with our clients to deliver on the most critical components of their investment process, leveraging the full resources of the firm,” he said. “The breadth and depth of our platform allows our sales team to have unique resources that can be tailored to the needs of our clients across products and geographies.”
Vargas also lauded his team for the development of new technology, which remained an important part of evolving the firm’s workflow.
While the absence in capital market activity broadly continued for a second year, Morgan Stanley’s salesforce went “back to the basics of identifying alpha generating ideas across the partnership with our research and product teams globally,” said Kingetsu.
This ability is especially paramount for a top generalist sales team. “Morgan Stanley is a large and complicated organization with many experts across the world,” she added. “The best salesperson is someone who has the trust and ear of key decision makers at our clients, are quick to react to changes in the market, and knowing our organization fully, to deliver the full firm in way that our competitors cannot.”
A top specialist salesperson, according to Ashton Curtis, head of sector sales in the Americas for Morgan Stanley, can go deep on an industry or individual stock, but can keep the conclusion simple for sub-sector experts and generalist portfolio managers.
“Beyond that, rigor around consistency of product output, providing context around headlines, earnings, research reports, as well as knowing their audience and the market’s mood at any given time are critical aspects of a successful specialist,” he added.
Morgan Stanley took a “collaborative approach to sales management in the Americas across regional and sector specialties,” Savone said. “That allowed for the teams to work closely as many themes—whether it is AI or GLP-1—are global in nature. The variety in the cadence in central banks also proved to be a fruitful way of understanding how a variety of markets trade in different parts of the cycle.”
The year had its surprises, especially around the “enduring” rates question, according to Michael O’Sullivan, co-head of Americas equity sales at Morgan Stanley.
“By this time of year, many would have expected the outlook on rates to be less debated. As we entered 2023 consensus was clearly negative with many predicting a steep pullback in equities in the first half of the year with an eventual Fed pivot leading to a rebound,” he said. “From an index level, the equity market proved to be more resilient than expected as key themes such as AI and GLP-1 drove major divergence in performance and US economic strength has led to a view that rates will stay higher for longer.”
