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After leaving Deutsche Bank, Simon Adamson, previously co-head of European credit research at the bank, joined the London office of independent fixed-income research firm CreditSights on April 1. The New York-based company has more than doubled in size to boast a research team of 17 senior analysts since it was founded in November 2000 by Glenn Reynolds, former head of global corporate bond research at Deutsche Bank. Although CreditSights has a couple of independent competitors in the US, it is the first independent to set up in Europe. Adamson joins Anja King and Nesche Yazgan who started at CreditSights last November, to make a three-strong London team which is becoming something of an enclave of former Deutsche bankers. King was co-head of European high-grade credit research along with Adamson and Yazgan covered investment-grade automotives and transportation and telecoms equipment. Of the 17 senior analysts at CreditSights before Adamson’s arrival, eight joined from Deutsche.
Adamson, who will cover European financial institutions in his new job – as he did at Deutsche – says joining the firm will be an exciting opportunity. “It’s a young and dynamic company founded three years ago and has attracted a host of top-class analysts.”
Lively style
Between them, those analysts deliver in a lively style all the qualitative strategy and sector research expected from a sell-side firm as well as emerging-market coverage on a daily basis. The firm also has a quantitative research tool called BondScore, which measures company credit risk and produces credit risk estimates for 1,800 issuers over the next 12 months. “Talking to investors in the past few years, they want a place which can link all the research issues together and here you can get that all in one,” says Adamson.
Adamson is attracted to the idea of having a purer research role, without the distractions of working for a full-service bank. “At an independent, you can focus on the research without all the other distractions – the internal issues, the meetings and new-issue research. As a sell-side analyst, the time you have to spend looking at breaking news is often more limited. I also expect compliance restrictions to play an increasing role on the sell side in terms of the type and timing of credit research.”
Corporate accounting scandals and the record number of bankruptcies mean that demand is increasing for research that is independent from investment banking ties. “The analysts there [at CreditSights] are highly qualified and not tainted by the investment bank sell-side label,” admits one sell-side analyst. “A number of investors take an interest in this and paid research in general following all the investigations into equity research.”
This seems to be borne out in the subscribers to the CreditSights paid-for service, which costs $12,000 for an individual membership annually. According to Peter Petas, a founding partner of CreditSights and ex-head of global emerging markets debt strategy at Deutsche, 500 companies in 14 countries subscribe to its research.
These include clients in the UK, Germany, France, Italy, Belgium, the Netherlands, Switzerland and Scandinavia. Petas says the company wants to add five to 10 analysts in Europe within a year.
