Buying and selling shares for clients, dismissed as an increasingly obsolete business in the days of more lucrative bespoke derivatives and high-volume electronic trading, may be coming back into fashion. Barclays’ move to rebuild a European cash equities business, complete with research analysts, sales people and traders, highlights the attraction of relatively simple businesses after the bursting of a bubble in complex investments that were hard to value and, latterly, impossible to sell. Five years after Wall Street firms paid $1.4bn to settle claims that they issued biased research to win investment banking business, fund managers are turning back to the so-called sell-side for advice and ideas, according to US research firm Tabb Group. Adding to the trend, institutional investors have been forced to slash in-house research staff after this year’s 40% decline in the main indices.
