American Investment Bank

JPMorgan, Credit Suisse Top Greenwich's List of Equity Research, Services

U.S. equity research and related services from JPMorgan Chase & Co. (JPM) , the second-largest American bank by assets, was voted the most valuable to asset managers surveyed by Greenwich Associates, a report yesterday said.

Credit Suisse Group AG (CS) won the most U.S. equity trading volume based on commissions spent, the survey from the Stamford, Connecticut-based research firm said. The two brokers, along with Morgan Stanley, Bank of America Corp. (BAC) and Goldman Sachs Group Inc. (GS) , placed in the top five in both categories. The responses from 217 fund managers and 304 equity traders were weighted by the dollar value of the commissions spent.

Asset managers decided how much to pay brokers from a commission pool that shrank 12 percent in the year that ended in mid-February to $11.6 billion, Greenwich said in another report on U.S. equities earlier this month. The contraction occurred as trading volume on American exchanges declined about 14 percent, according to data compiled by Bloomberg.

“Customers depend on research for their investment decisions,” said Joseph Cangemi, managing director at BNY ConvergEx Group LLC and chairman of the Security Traders Association , both based in New York . “If there’s less trading commissions available, firms will be forced to spend a greater percentage of their commission dollars on research.”

Commissions paid for research and advisory services, including access to executives at companies, rose to a 10-year high of 59 percent of the total from 53 percent a year earlier, Greenwich said. The dollar amount spent remained about the same at $6.8 billion, compared with $7 billion a year earlier, according to John Feng , Jay Bennett and John Colon of Greenwich.

“Firms spent more proportionally for research services because they needed to protect their access to that advice,” Feng, a managing director at Greenwich, said in an interview. “Commissions are the currency to access those insights.”

Institutional brokerage commissions shrank and trading volume slowed as the U.S. stock market produced smaller gains. The Standard & Poor’s 500 Index, the benchmark measure of U.S. equities, surged 32 percent between Feb. 13, 2009, and Feb. 16, 2010, recovering from the subprime-mortgage crisis that saddled banks worldwide with $2.06 trillion in losses and writedowns. In the next year, it gained 21 percent.

Greenwich said the nine biggest brokers, which it didn’t identify, got 68 percent of U.S. equity commissions, up from 65 percent last year, while mid-size and regional brokers got 18 percent. Securities firms that execute orders for institutional clients without engaging in proprietary trading or offering investment banking services received 13 percent.

Barclays taps 2 to gear up CMBS push | Abort America

Barclays Capital has hired two former Lehman Brothers executives to expand its commercial-mortgage-backed securities operations.

The two new hires are Larry Kravetz and Spencer Kagan, who join Barclays from G2 Real Estate, a commercial real estate merchant bank. Previously, both men worked with Lehman, which in 2008 became the largest bankruptcy in American history. At Barclays, Mr. Kravetz will be the managing director of CMBS finance and will report to Tom Hamilton, head of securitized products trading. Mr. Kagan be the managing director of CMBS credit and underwriting and will report to Mr. Kravetz.

“Larry and Spencer bring more than 40 years of experience in commercial real estate to Barclays Capital, and they will be instrumental in developing our CMBS origination business,” Mr. Hamilton said. “Their expertise will be highly complementary to our market leading sales, trading and research franchise as we expand the suite of products we are able to offer our real estate clients.”

At G2 Mr. Kravetz was a managing partner and founding member, as well as a partner in its parent company, G2 Investment Group. Prior to that, he spent more than 15 years at Lehman Brothers in various roles across the firm’s commercial loan origination, underwriting and securitization businesses. He also founded and headed the firm’s large loan group. He began his career in the real estate investment banking group at Chemical Bank.

Mr. Kagan was a partner at G2 Real Estate. Prior to that, he worked for more than 10 years at Lehman Brothers, most recently as a managing director and head of large loan credit and underwriting. Before joining Lehman Brothers, Mr. Kagan was head of the new CMBS ratings group at Standard Poor’s.

Following the bankruptcy of Lehman Brothers in September 2008, much of its North American investment banking and capital markets businesses were purchased by London-based Barclays.

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