JPMorgan's rebooted institutional equities sales team has a message for its rivals.
The bank wants to be a top five Australian cash equities broker within 18 months, and top three as soon as possible after that.
And it plans to do it by claiming a greater "mindshare" of Australia's biggest investors, and by being more relevant at a time when institutional investors are under great demands from their own clients.
That means selling fundamental research-led calls from the bank's 33-strong equities analysts, offering liquidity and exposure to new equity capital markets deals.
"We have strong aspirations for this business," says Robert Bedwell, who runs JPMorgan's Australian sales team across all market products, including equities.
"The immediate goal we have set ourselves is we need to be very relevant to the key domestic accounts in this market. We want to be top five and we ultimately want to be top three [in cash equities]."
Bedwell says JPMorgan set a global goal to be top three in cash equities a few years ago and started by addressing its positions in the world's biggest markets, New York and London. Now the bank has turned its attention to Asia Pacific, and more specifically Australia.
Local reboot
JPMorgan's local team is ranked seventh in Australian cash equities market share this year, with 6.5 per cent of the market, up from ninth spot this time last year.
The local reboot sees former Goldman Sachs sales duo Steve Maartensz and Andrew (Art) Tanner take over as JPMorgan's co-heads of equities distribution, while their former colleague Dyson Bowditch will run the equities syndicate.
All three were hired as managing directors at a time when most banks are under pressure to shrink equities teams, rather than expand them.
Bedwell knows climbing into the top three in Australian cash equities would be no mean feat.
"For us to get to where we want to go, we needed to make the changes," Bedwell says.
"I want to get there as quickly as possible. To do that there are some really strong incumbents in the market here and we are really respectful of the work they have done to get there.
"But market positions are not a birthright. They are not immovable objects. We will play the long game."
Maartensz, who started at JPMorgan in Sydney last week after 16 years at Goldman Sachs, says the hires sent a strong message to the market.
"When I looked around the market for opportunities, there is one bank that is willing to invest and that realises Australia is a unique market," Maartensz, who specialises in sales trading into the Australian long-only institutional investor market, says.
"Unlike the rest of the world, you can't have that JPMorgan global model and roll it out here. It is about relationships."
Strong ideas
His co-head, Art Tanner, also started at JPMorgan last week after 21 years at Goldman Sachs.
Tanner, who specialises in research sales, says that for all the changes to buy and sell-side market participants since the global financial crisis, stockbrokers had one key job.
"It is more important now, than ever, to have strong ideas," Tanner says.
"Everyone is under pressure. [Fund managers] are under pressure performance and fees wise, so we have to provide them a strong list of ideas.
"It comes back to fundamental research in my view, good product and ideas that clients can use to generate performance."
Tanner and Maartensz are expected to work closely with JPMorgan's research team, headed by Jason Steed, to sell their key calls to clients.
Steed's team reckons fund managers should be overweight banks and resources, and buy the likes of Fortescue Metals Group, Westfield, Telstra and AMP.
Steed, who doubles as the firm's Australian equities strategist, is generally positive on Australian equities and recently reset his 12-month target on the S&P;/ASX 200 to 6000 points, up from 5800.
The big issue in equities research globally, though, is regulatory change. Starting next year, fund managers in Europe must pay for research from their own funds, rather than using client money. It is expected to put strain on external research providers, including the big investment banks.
While the changes are constrained to Europe for the moment, investors and brokers globally are watching closely to see whether the move catches on.
""I think it is something that is some years away [for Australia]," Steed says.
"Our expectation is that we are not going to see this change come to our market in the near term. It may come over time, but it doesn't change what we do as a business. In research, we are very strong fundamental research house and will continue to be."
