TAC firmly believes in the strong relationship between macroeconomic performances, background and features, and many microeconomic, industry or corporate issues. Even though “bottom-up” approaches are absolutely valid for such microeconomic issues, we consider that they should most often be completed by “top-down” analyses.

TAC has therefore developed a strong ability to produce high value added corporate and financial research, usually in connection with well-identified macroeconomic issues, be they trade and investment opportunities, competition and policy regimes, financial markets’ determinants or the international macroeconomic environment. Our “top-down” approaches have been put in place mainly for four types of studies:

• Industry-specific research, notably (but not only) on the banking industry and financial markets, both in developed and mature countries, and in emerging economies. This covers notably the impact of regulatory issues (for example: Basel II and SMEs, banking versus financial intermediation mechanisms and equilibriums), the links between specific industry performances and broad macroeconomic factors (demand, exchange rates, interest rates), supply-side analyses (competition, pricing power, …), and key financial variables determinants (exchange rates, short- and long-term interest rates in fixed income markets within the G5, equity prices). The latter aspects of our research enables TAC to provide strong asset allocation tools to institutional investors, and can be combined with the same type of research concentrated on emerging markets. Our expertise on the banking industry has been considerably enhanced lately when Mr Jean-Pierre Patat, Honorary Director General of the Bank of France agreed to join TAC as a special advisor on banking issues.

• Analysis of business segments behaviour and associated risks for large companies, whereby TAC designs and implement management tools enabling senior executives to monitor the key structural and cyclical risks that the company is facing through its portfolio of business lines or activities, including cross country/activity analysis and operational recommendations, for example in the form of currency hedging or risk mitigation strategies.

• Corporate risk / credit risk research, mostly on companies and banks operating in emerging markets, where the usual information (provided, for instance, by the large rating agencies) is either not available or not reliable. This includes complex combinations between standard financial analysis on detailed corporate accounts, scenario / stress testing techniques, and highly sophisticated quantitative tools. The results can be in the form of corporate or bank ratings, indicators of future performances, or portfolio determination with risk minimization processes.

• Financial advisory services, usually when corporate financial decisions are significantly influenced by macroeconomic assumptions and scenarios. Valuation methods that are used in cross border M&A operations or in foreign investment selection always rely on exchange rate, interest rate, demand factors, prices, etc. and TAC is able to provide a totally independent and “neutral” assessment of these key macroeconomic assumptions and figures, to suggest credible alternative, and to make quantitative simulations according to different assumptions (e.g. return on investment, cost of acquisition, opportunity for currency hedging).

Research methodologies vary greatly according to each study and each customer’s precise requirements, but they would usually include the construction of large databases, the application of quantitative instruments, and the execution of surveys or specific field missions. When a specific industry expertise is not available in-house (as is mostly the case, except for the banking or financial sector), TAC has the ability and flexibility to tap in its large network of independent consultants or specialised consulting firms to find the exact profile required for the research. Last but not least in times of intense soul-searching in the financial research industry, one key extra ingredient in TAC’s value-added is its total independence, from corporates as well as from banks or other financial institutions.