The credit derivatives sector is bucking the trend of flat recruitment demand amid rising pay levels, a survey shows.
Salaries ranging from $225,000 - $250,000 (€250,000 - €278,000) with a bonus range of $1.5m - $2.5m for a global head of credit derivatives are leading the way, with rates expected to rise by more than 7% in 2002, according to a survey by the headhunters Astbury Jones, a niche London firm which focuses on credit derviatives and compliance.
Jonathan Astbury of Astbury Jones, said: "Events in 2001 have highlighted the fundamental need and beneficial potential for credit derivative structures, both in terms of hedging processes but also in an efficient risk versus return allocation of regulatory capital."
Not only is the genre expanding globally, it is being developed by both boutique and bulge bracket firms, in addition to a range of insurance firms, multinationals and governments, he said.
This has led to a shortage of suitably skilled staff at senior levels.
There is also a trend towards greater use of synthetic forms of securitisation, especially Collaterised Debt Obligations (CDOs), alongside vanilla products, the survey said.
It quoted Jonathan Davies, director of credit derivatives at PricewaterhouseCoopers as saying : "Ultimately people have finally recognised that credit derivatives are the only truly effective way to hedge credit risk. Concurrently regulation on a global basis has evolved to the point where it can now adequately support these structures."
The figures in the survey are derived from 30 firms in London, New York, Singapore and Tokyo in the week ending 11th December and are an aggregate from both global and boutique firms.