With independence, ex-bank analysts find, comes freedom to make sell calls on investments

After 27 years working for investment banks and hedge funds, Hong Kong-based equity research analyst Paul Schulte decided it was time to fly solo.

Carrying a résumé littered with big names like Nomura and CCB International – the overseas investment banking arm of China Construction Bank – and several others, some of which no longer exist, Schulte wished he had gone independent sooner.

The independent research industry has started to gain a foothold in Asia. It is already relatively mature in the West thanks to regulations enacted in the last decade in the United States to end the conflicts of interest between banks and analysts.

Now, a growing number of analysts are trying their luck as independents, selling knowledge and expertise picking stocks, as investment banks have cut back on research departments in the wake of the global financial crisis.

“We are in a very different world,” Schulte, a 48-year-old American, said in an interview in an office space in Hong Kong that he shares with other companies.

“In the last four years, if you don’t see that the research game in investment banks is over, then you are just a fool,” said the ex-Lehman Brothers executive.