RBC Capital Tops Brendan Wood Analyst Survey, Ending BMO's 29-Year Streak

RBC Capital Markets ranks first for equity research in Canada, ending a 29-year streak for BMO Capital Markets in an annual survey by Brendan Wood International.

The investment-banking arm of Royal Bank of Canada had the top-ranked research department this year, according to the poll by Brendan Wood, a Toronto-based research and consulting firm. BMO Capital, a unit of Bank of Montreal, ranked second, followed by TD Newcrest, CIBC World Markets and Scotia Capital.

“We’ve had the conviction that we have built the best research team in the country,” said Richard Talbot, 46, co-head of global research for RBC Capital Markets in Toronto. “The report adds validation to that, and we’re thrilled.”

The survey of 258 money managers and buy-side analysts was conducted during the 12 months that ended Sept. 1, Brendan Wood said. So-called TopGun analysts are chosen on the basis of whether survey participants would pay for their research, as well as analysts’ investment ideas, quality of analysis and knowledge of their sector. RBC also had the most TopGun research teams this year, followed by BMO Capital.

“The Brendan Wood rankings are very well followed,” said James Lorimer, a managing director in Toronto with Ludwig Financial Recruitment. “When we’re talking to research directors about candidates, they follow Brendan Wood rankings pretty closely to see who are the top-ranked guys.”

RBC Capital analysts cover about 1,250 companies worldwide, compared with 775 five years ago, Talbot said.

“We’ve been on a relentless campaign over the last three or four years to rebuild the research product at RBC,” he said.

U.S. Coverage

RBC’s research has improved because of increased coverage south of the Canadian border, said Mike Abramsky, a top-ranked software and services analyst who covers companies such as Research In Motion Ltd. and Apple Inc.

“I think RBC as a platform has improved overall,” said Abramsky, 53. “We have more leverage of research across the platform, such as our cooperative work with the U.S. analysts” in areas such as the smartphone sector.

Andre-Philippe Hardy, who came to RBC in 2007 from Merrill Lynch, is the top-ranked bank analyst for the first time. The Toronto-based analyst said he thinks the ranking is the result of his experience, his lengthy research reports, and his three associates.

“I think the right formula is to be constantly in touch with clients, to write value-added research, and not being afraid to be outside of consensus,” Hardy, 33, said in a telephone interview.

Banks Over Insurers

Hardy has recommended favoring Canadian lenders including Toronto-Dominion Bank and Bank of Montreal over life insurers. The 10-company S&P/TSX Banks Index climbed almost 7 percent this year, compared with a 21 percent drop for the six-company S&P/TSX Life & Health Insurance Index.

BMO Capital analyst Randy Ollenberger was recognized as the No. 1 TopGun analyst for the oil-and-gas large cap category.

“It primarily means that the clients that are voting in this survey put value in the service that I and our oil-and-gas team are providing them,” Ollenberger, 48, said in a telephone interview from Calgary.

Ollenberger, who has been named a TopGun analyst before, credits the work of his nine-member group in Calgary and Denver for producing “big picture, macro-themed pieces” that resonate with clients in helping to win the accolades.

Before the latest survey, BMO Capital Markets ranked first for overall research in the Brendan Wood International survey since 1981, according to marketing material published earlier this year by the Toronto-based bank.

The bank ranked first this year for research quality and had the highest “reputational franchise score,” said Mike Miller, head of equity products and research for BMO Capital Markets, in an e-mailed statement.

Brendan Wood provides advisory services to investment banks, corporations and TopGun professionals in global markets.

To contact the reporters on this story: Sean B. Pasternak in Toronto at spasternak@bloomberg.net; Doug Alexander in Toronto at dalexander3@bloomberg.net.

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net; David Scheer at dscheer@bloomberg.net

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