European money managers and brokers, look out.
U.S. money management firms and securities houses, particularly those that emphasize research, tend to make wonderful impressions when they meet the largest companies in continental Europe.
That's the conclusion of a survey of 350 European companies with a combined market capitalization of close to $4.27 billion.
And that impression could lead to changes in the money management and brokerage industries.
"A real concentration of business is under way," said Stephen Parker, a director at Tempest Consultants Ltd. in London and author of the Reuters European Company Survey.
"In Europe, the winners appear to be U.S. houses on both the buy and sell side," he said. American houses Fidelity Investments, Capital Group and J.P. Morgan Investment Management, are ranked the top fund managers. The same companies ranked Merrill Lynch & Co. Inc., Goldman Sachs & Co. and J.P. Morgan Securities Inc., the top brokers.
British firm Schroder Investment Management, however, did impress the leading European companies. Schroder's Mark Ferguson tied Robert Tann of Capital Group for the top fund manager. Schroder Investment Management also finished fourth in the survey's listing of leading fund management groups.
The survey was sent to 350 companies, of which 244 responded. Those 244 account for 84% of the $4.27 billion market capitalization. The companies evaluated more than 680 fund managers and buy-side analysts, and more than 200 brokers and securities houses.
U.S. managers based in Europe traditionally have emphasized hands-on research more than their counterparts, Mr. Parker said.
Analysts with the top-ranked firms vigorously follow their companies and sectors and routinely visit the companies polled in the survey, Mr. Parker said. They often impress the companies with the depth of their knowledge.
The winners agreed with Mr. Parker.
At J.P. Morgan Investment Management in London, analysts cover a sector for years, know its regulations and demonstrate a depth of knowledge, a spokesman said. The firm thinks this gives their analysts an edge.
"American houses with deep research were better positioned" to understand the increasing globalization of markets, he said. Analysts with American money managers often focus on sectors and industries rather than on countries, he said. Such knowledge is key in an era of cross-border mergers and acquisitions and global markets reacting instantly to each other.
The survey ranked money managers for a variety of qualities. Fidelity Investments, Capital Group and J.P. Morgan Investment Management were first, second and third, respectively, in seven categories: the managers' use of a company's time; the quality of the 'on-going relationship'; the managers' understanding of a company and industry; their detailed knowledge of a company's report and accounts; their preparation for one-to-one meetings; the quality and depth of their research; and their feedback from meetings.