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Financial Times, April 14, 2009 article

 

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Crédit Agricole arm set for US boost as investors seek research

By Francesco Guerrera in New York
Published: April 14 2009 03:00 | Last updated: April 14 2009 03:00
 

CLSA, the Asia-focused brokerage arm of Crédit Agricole, is planning an aggressive push in the US spurred on by the belief investors will demand research that is both more independent and more international.

Jonathan Slone, CLSA's chief executive, told the Financial Times, the firm wanted to set up a presence in the US and planned to hire up to 30 analysts over the next few months.

CLSA's first major recruit was Mike Mayo, one of Wall Street's best-known banking analysts who joined with his team from Deutsche Bank last month.

Mr Slone said that CLSA - which is 65 per cent owned by Crédit Agricole, with the rest controlled by management - served international fund managers whose need for global research and brokerage services had risen as a result of the crisis.

Mr Slone said CLSA was looking to hire analysts covering sectors such as commodities, natural resources and retail, where a strong US presence would complement its Asia expertise. But he said his firm would not try to compete with large Wall Street firms by issuing hundreds of research notes a month and trying to predict companies' quarterly results.

"In the US, much of the industry is focused on quarterly numbers. We are not going to do that," he said, adding that CLSA's business model should enable it to make a profit in the US from the outset.

Calyon, Credit Agricole's investment bank already employs a handful of analysts in New York but CLSA's US plans highlight the rapid changes in market for trading and research.

With many banks hobbled by huge losses and keen to cut expenses in their least profitable businesses such as research, a number of big-name analysts have left for smaller firms.

Market watchers say that investors, who have traditionally received research from large banks as part of a broader package of banking and advisory services, are also more likely to switch to independent providers as the crisis has reduced their need for other products.

Two days before Mr Mayo left Deutsche for CLSA, David Rosenberg and Richard Bernstein, two of Merrill Lynch's best-known analysts, left the investment bank, which is now owned by Bank of America. Last month, Meredith Whitney, whose bearish call on Citigroup earned her a large investor following, left Oppenheimer & Co, to launch her own research boutique.

 

© Copyright The Financial Times Ltd 2009.

 

 

 

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