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MONEY MANAGEMENT
Sell-side research may be in turmoil, but analysts working at money management firms have never been so valued. Here are ten at the top of their game.
There's no place to hide. Wall Street's stock pickers have earned censure for their conflicts of interest and their contribution to the stock market bubble. Though less flamboyant, analysts at big money managers sport their own badges of shame: the sorry performance of the funds they advise.
Today's bear market has left every research department with its share of embarrassing calls. But the shortcomings only underscore the importance of rigorous, insightful research, especially for institutional investors. Wall Street proposes. The buy side disposes. In the end, it manages the money and must make the picks and live with them.
Despite the traumas of the past few years, many researchers are doing superb work. In the pages that follow, you can read about the most outstanding of these analysts, selected for 2002's Best of the Buy Side. In keeping with the changes caused by tumultuous markets, six of our ten winners make their first-ever appearances. (Institutional Investor asked the Wall Street analysts who received votes in our All-America Research Team to single out their most esteemed counterparts at money management firms. Nearly 600 sell-siders from 87 firms responded.)
Doing good research in-house matters more than ever to the buy side. Representing institutions with a combined $13.5 trillion in worldwide assets, buy-side analysts have the clout to make companies take notice. These researchers can't hide behind confusing rating systems; they have to tell it straight to their firms' portfolio managers.
"It has never been as important to do good, fundamental, bottom-up research," says Mark Mandel, director of global industry research at Wellington Management Co. "You can differentiate yourself and make investments based on that knowledge."
If, as seems probable, regulatory challenges and falling profits force Wall Street firms to slash research staffs, big money managers may step into the void. "The more Wall Street retrenches, the less efficient the markets will be. That means more opportunities for us," says William Stromberg, director of equity research at T Rowe Price Associates.
Adds Katherine Collins, group leader of equity research for Fidelity Management & Research Co., "There's nothing...