Paulson & Co., BlackRock Inc. and UBS AG are leading a hiring spree of London-based mining analysts as banks, brokers and hedge funds compete to bolster research teams in an industry valued at more than $350 billion in the U.K.
“We haven’t seen this much movement before,” Philip Charsley, director of financial markets at London-based Hays Plc, the U.K.’s biggest recruitment firm, said in a phone interview. “It’s the hottest sector in the market right now.”
At least eight mining and steel analysts have changed roles in the city in the past two months. Nomura International Plc suspended coverage of stocks including BHP Billiton Ltd. and Rio Tinto Group, the world’s biggest mining companies, because of changes to its team. Sanford C. Bernstein Ltd. also halted industry coverage, said two people familiar with the situation.
Rising demand for mining analysts coincides with surging prices for metals and bulk commodities. The weighting of basic materials stocks in the U.K.’s benchmark FTSE 100 Index has almost tripled since 2004 to 14.5 percent of the index and is now the third-largest industry with stocks totaling a market value of 225 billion pounds ($366 billion) at June 30, FTSE Group said.
Olivia Ker, who covered stocks including BHP, Rio, Xstrata Plc and Glencore International Plc, has left UBS for BlackRock, UBS said in an e-mailed response to questions. Paul Galloway started with Paulson, the $37 billion hedge fund headed by John Paulson, on Aug. 1 after moving from Bernstein, a person with direct knowledge of the matter said.
‘Fight’ for Analysts
Melissa Garville, a London-based spokeswoman for BlackRock, and Paulson & Co. spokesman Armel Leslie declined to comment.
Evy Hambro of BlackRock, the world’s largest asset manager, runs the $17.8 billion World Mining Fund. BlackRock is the largest holder of Melbourne-based BHP, the world’s biggest mining company.
“There’s been this fight to find really strong mining analysts,” Charsley at Hays said. “They have specialist knowledge. In the case of mining you will be found out in seconds if you don’t understand the sector really well.”
Ephrem Ravi, formerly a senior mining analyst at Morgan Stanley in London, will join Barclays Capital in Hong Kong, two people familiar with the move said, declining to be identified because the appointment isn’t yet public. Carsten Riek joined UBS on July 25 from Morgan Stanley to lead coverage of the European steel sector with Saurabh Kothari, UBS said in an e-mailed statement.
Riek and Ravi were both members of the top-ranked mining analyst team in Europe at Morgan Stanley, according to this year’s Extel survey.
Macquarie Securities Group, a unit of Australia’s largest investment bank Macquarie Group Ltd., said yesterday it hired Jeff Largey from Nomura to lead its Europe, Middle East and Africa metals and mining research from London.
Nomura said July 28 it was suspending coverage of BHP, Rio Tinto, Vale SA and Vedanta Resources Plc because of a reorganization of the team. “We plan to resume coverage in due course,” it said in a statement. The bank’s view on the industry remains bullish, it said.
Paul Cliff, formerly of Nomura, will join ING Groep NV as head of its EMEA metals and mining team. ING plans to add another mining analyst shortly, it said in an e-mailed response to questions from Bloomberg.
“The resources space is increasingly important to our clients, and in an effort to meet their demands for world-class research coverage, we have made significant investments to upgrade our metals and mining product,” Mike Kaplan, ING’s global head of EMEA equity markets, said in the statement.
Macquarie’s Largey, formerly a steel analyst with Nomura, will report to Julian Wentzel, head of research in the region, the bank said. Macquarie also hired Alon Olsha in May as senior analyst on the metals and mining team, it said.
“Over the coming months, we intend to build the team out further given the importance of this sector to Macquarie’s various businesses,” Wentzel said in a statement yesterday.
Max Layton has joined Goldman Sachs Group Inc. in London, two people familiar with the hire said. Layton was previously a commodities analyst at Macquarie. Sophie Bullock, a spokeswoman for Goldman, declined to comment.
Initial public offerings and other fund raisings are among events that can prompt brokers to strengthen their research teams, Charsley said. Glencore, the largest listed commodity trader, last month hired Paul Smith as investor relations manager from Marshall Wace Asset Management Ltd. where he was an analyst and portfolio manager for the London-based hedge fund.
Glencore sold $10 billion in shares in a May IPO managed by Citigroup Inc., Credit Suisse Group AG and Morgan Stanley as global coordinators. Bank of America Corp. and BNP Paribas as joint bookrunners. Barclays Plc, Societe Generale SA and UBS were appointed co-bookrunners.