New research reveals that investment banks are cutting back on both the number of analysts they employ and the number of stocks they cover.
According to Starmine, 326 UK stocks are currently researched, the lowest number since 1999. Analyst numbers have reduced 15% from the 1999 peak to 293. Across Europe, stocks researched have fallen by 15% since the 2002 peak and analyst numbers have fallen by around 20% since 1999. Only in North America have the number of stocks researched increased - to a record 298, up 20% on last year.
US regulator the Securities and Exchange Commission is said to be investigating around a dozen brokerage firms, including Merrill Lynch, Morgan Stanley and Charles Schwab, for failing to adhere to the 'best execution' obligation, whereby stocks are acquired for customers at the best available price.
UBS is said to have acheived a hiring coup, when the firm attracted Merrill Lynch star broker John Fitzpatrick to join up. Fitzpatrick is said to have managed in excess of $1bn for Merrill clients, including former General Electric CEO, Jack Welsh. Merrill is trying to play down the broker's move, saying that 'we're net positive in recruiting from UBS this year'.
Finally, former US Vice-President Al Gore is starting up a London-based investment management business with David Blood, who used to head up asset management at Goldman. The new firm is to be called Generation Investment Management. The firm will also have an office in Washington (surprise, surprise). Minimum investment will be $3m.
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