TRANCHED: Time to move into something a little smaller

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Banking as we knew it is no more. Last week the UK and US stock markets hit levels last seen when I was at university. Citigroup, the mother of all investment banks, has seen its share price drop below $1 and is probably in its death throes. And most of those I know who are still in the industry received bonuses close to zero, even if they had a profitable year.

At the same time, banker bashing is growing in popularity. Radical environmental and far left groups can scent blood in the water. And the government appears to be encouraging this sentiment with its talk of changing laws to reclaim the very generous pension it previously granted Fred Goodwin.

In the circumstances, now seems a very good time to be working for a smaller operation . And with hedge funds increasingly out of the picture, those smaller operations are more frequently the kind of consultancy that I find myself in.

This kind of consultancy is all about ex-bankers utilising specialised knowledge and getting paid for providing advice and expertise to banks and other financial organisations on a fee basis. Consultancies involving ex-structured credit bankers are particularly popular - we have in-depth knowledge of deals structured for clients and can value them and (hopefully) help their owners dispose of them.

Many of the new consultancies are made up of just a few ex-bankers working from home in many cases or in some cases renting tiny offices all over London. With the commercial property market flooded with empty office space built in the good times, rents are very low and leases increasingly flexible. I've heard of start ups simply being asked to cover the tax costs of offices rather than pay actual rent, and of West End office space for six employees costing as little as 1600 per month. Some landlords seem to be offering low rent agreements to attract initial tenants, simply to show other prospective clients that the offices are viable.

Working for a start up will always be a risky proposition: salaries are often low, or even non-existent; bonuses are rare. The upside is in the equity. Bankers have spent a long time earning big money as employees. From now on, the rewards are in entrepreneurialism - and they are a lot less certain.

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