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    Ex-Nomura currency analyst Bilal Hafeez wins clients at Macro Hive

    Abstract:"You need to understand how clients think."

      Bilal Hafeez, a former currency analyst at Nomura in London, just started up a research curation service for fund managers.

      In effect, he's competing with the bank he once worked for. So far, he's hired four employees and says he has snagged big-name clients.

      The move highlights the upending of the financial world, sped up by unintended consequences of a law designed to make fees more transparent.

      Bilal Hafeez left his job as a currency analyst at Nomura earlier this year. He's already found a new career — as an independent analyst winning clients on his own — and says the feedback has been so positive he's not likely to ever go back to banking.

      The project is called Macro Hive, where Hafeez curates and writes about macroeconomic trends, and how they affect financial markets.

      He says he's hired four employees and managed to sign up about 1,300 — soon-to-be monetized — subscribers so far for his bi-weekly subscription newsletter, and while he declines to name names, he says they include founders of hedge funds, big asset managers, policy makers, and professors.

      He's had big banks try to hire him to do the same within their own units, and one bank even offered to buy a stake in his new venture.

      “There's a lot of good content out there, but just too much of it,” London-based Hafeez told Business Insider in an interview. “The larger issue is the challenge of curation and filtering. To do that well, you have to have a lot of experience in markets, from a research perspective. And on the other hand you need to understand how clients think. That's a really big problem to solve.”

      In effect, Hafeez is competing somewhat with the bank he once worked for. That's encouraged in the new environment enabled by an obscure European law called MiFID II. Under MiFID, a 7,000-page tome that aims to increase transparency on how clients are charged for services, banks must charge separately for research and trading.

      In theory, forcing separate payments removes the historically relationship-driven decisions over which bank to trade with. Research was typically used as marketing materials of sorts, luring clients in to then do their trading with a bank.

      In practice, though, fund manager wallets are shrinking to accommodate the extra payments for research. The world of analysts is shrinking, and fast. Big banks are keeping only the best in their fields, while some enterprising analysts, unhindered by ties to trading fees, have struck out on their own to start boutiques.

      “MiFID is a big moment for research to adapt,” Hafeez says, adding that MiFID, which kicked in in January 2018, was a large motivating factor for Macro Hive. “By separating research from trading, now institutions can say, 'I'm willing to trade with a bank, but I want to get research somewhere else.”

      Banks at the beginning of the year were expected to earn about 20% less on their European equity research — a drop of about $300 million, Greenwich Associates has estimated.

      It explains why market watchers were shocked when Deutsche Bank — when announcing a plan to gut sales and trading and axe 18,000 jobs — decided it will keep the majority of its research unit. Deutsche Bank isn't known for having a research product that's strong enough to compete amid the new market realities, people inside the bank told Business Insider at the time.

      Hafeez also has a side hustle as a wellness guru, with plans to speak at a conference in Switzerland about how to improve productivity and overcoming the “comparative mindset,” troubles Hafeez says are especially acute in the finance industry.

      Read more on Hafeez's wellness crusade in financial circles: Meet the London currency analyst who moonlights as a wellness guru to Wall Street hedge funds and bankers

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