Repeating in first place is Howard Chen, 35, of Credit Suisse. Given that the central bank may well back off its intervention, the economic outlook is modestly improving and industry regulatory reform is increasingly clear, Chen is encouraged by the sector’s prospects. “All of that should be quite positive for growth, confidence levels and ultimately capital market activity,” he contends. At the same time, U.S. financial services management teams’ sustaining a focus on operations should lead to better returns in what he terms “a more vibrant revenue environment.” The analyst cautions, though, that the improving picture, including a less dire outlook in Europe, has pushed up valuations. So investors need be selective and seek out higher-quality franchises that aren’t commanding their historical premiums. One group that’s attractive to Chen is private equity and alternative asset management firms — New York’s Apollo Global Management and Blackstone Group, in particular. He does “especially good work” on those firms, one money manager attests. Chen credits new regulations that require large U.S. banks to operate in fewer business segments and adhere to higher capital standards, enabling the alternative asset managers to step into the breach and do more direct lending to middle-market companies. — Carolyn Koo |
The 2013 All-America Research Team: Brokers, Asset Managers & Exchanges, No. 1: Howard Chen
