July 27 (Reuters) – Citigroup (C.N) has hired Tony Brennan as its new head of equity market strategy in Australia, capping a year-long hiring spree that the group said will help it maintain market share.
Brennan, who was poached from Deutsche Bank (DBKGn.DE), was rated number two in Australia and number three in Asia in consultant Peter Lee & Associates’ ranking of equity strategists.
Citigroup said it needed to beef up in Australia after slashing jobs globally in 2008 as the global financial crisis hit, while rivals who were slower to cut jobs maintained their strong positions in Australia, which dodged a recession.
“So we found ourselves in the first half of 2009 at a competitive disadvantage — right strategy globally, wrong strategy in Australia,” Bruce Rolph, Citigroup’s head of investment research and analysis for Australia and New Zealand told Reuters.
The group launched a hiring spree a year ago focused on nabbing research analysts in metals & mining, energy, health care and real estate investment trusts (REITs) and financials.
Competitors such as CLSA and Nomura have also been snapping up analysts, but Rolph said Citi Australia was supported by its top five brokerage market share over 20 years, its capacity to invest in technology and global distribution platform.
“If you’re in that middle ground where you’ve got 3-5 percent market share, half a research team and you’ve got a bit of a technology spend, you are going to have difficulty,” he said.
“You’ve either got to really specialise or you’ve got to play the big global game.”
Citigroup ranked fourth behind Deutsche, UBS (UBSN.VX) and Macquarie (MQG.AX) in the first half of 2010, with a brokerage market share of 8.8 percent, handling A$124 billion ($112 billion) worth of trades.
That share is up slightly from 8.3 percent in the same period last year, when it ranked fifth, according to Australian Securities Exchange data.
CLSA’s market share in the first half of 2010 was 0.5 percent, while Nomura’s was 0.15 percent.
Citi did not have a specific market share target, but Rolph said its “natural” market share would be 9-11 percent.
Over the last year, Citigroup has snared JP Morgan’s (JPM.N) health care analyst, Alex Smith, and the REIT team from Credit Suisse.
More recently, in metals and mining, it hired David Haddad from RBC and a former strategist from top global miner BHP Billiton (BHP.AX)(BLT.L) Craig Sainsbury. It has also picked up analysts from fund managers, including Hugh Dive from Investors Mutual to cover building materials and chemicals. (Editing by Ed Davies)