Are we in the End Times for investment bank research analysts, whose numbers dropped by one-tenth since 2012? (That’s the dictionary definition of decimation, by the way…) The Financial Times’ Robin Wigglesworth, a former Middle East hand for the salmon-coloured paper, blames cull on regulatory change and says “the cuts are expected to deepen in the coming years.” He says “a survey of 30 global investment groups and investment banks by Quinlan & Associates last year indicated that research budgets would be cut by 30 per cent.” Wigglesworth gives the example of David Ader and Ian Lyngen who were earlier this year voted the top US Treasury analyst team in Institutional Investor’s prestigious poll for the 11th year running, “but at the time both were unemployed as CRT Capital Group, their company, was in the process of being shuttered.”

The inimitable Matt Levine also tackled the topic in his Bloomberg column yesterday, noting, “Investment bank research is a grim business, because it’s hardly a business at all. A business is, like, you make a thing, and you convince me to buy it, and I give you money for it. Research, classically, is: You make a thing (a research report), and you give it to me for [without charge], and I trade some stocks with your bank and you maybe get credit for some of the commissions. That model has fallen apart in recent years.”

Quant funds are taking over the world: Computer-based hedge funds have been admitted to a list of the all-time top 20 best performers who made the most money since inception for the first time, Lindsay Fortado and Miles Johnson write for the Financial Times. “DE Shaw, Citadel and Two Sigma, which all incorporate so-called ‘systematic strategies’ that trade using computer algorithms, joined the closely followed annual list compiled by LCH Investments, the fund of hedge funds run by the Edmond de Rothschild group… DE Shaw, which manages [USD 27 bn] in assets, entered the list in third spot, while Ken Griffin’s Citadel joined at number five. Two Sigma came in 20th place.” However, the list was topped by Ray Dalio’s Bridgewater, the world’s largest hedge fund, which made USD 49.4 bn since it launched in 1975. Second was George Soros’s Soros Fund Management with USD 41.8 bn since 1973 and despite a net loss of USD 1 bn in 2016. The research also found that the top 20 funds generated 46.9% of all the gains made by the industry since inception, while only accounting for 17.6% of the assets.