How hot is prime broking really?

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Recruitment in prime broking should surely be on fire.

The sector has been shaken up over the past 12 months. Hedge funds' concerns over counterparty credit risk has seen established players like Morgan Stanley and UBS lose out to the likes of JPMorgan, Barclays Capital and Deutsche.

The shakeup is encouraging hiring. Last month, Barclays Capital poached Ashley Wilson from Merrill Lynch to lead its prime broking effort. Wilson is rumoured to have been paid around $4.5m over two years.

Merrill Lynch is also hiring. It says it wants up to 40 people for its prime broking business, and appointed Mark Bailey to head its platform at the start of this month.

And Morgan Stanley has been rearranging its prime broking business after its market share plummeted over the past year. It hired Alex Erlich from UBS in May, followed by four people from JPMorgan's FX prime broking team shortly afterwards.

Does this mean that prime broking professionals are incomparably attractive? Sadly not. Recruiters in the sector say there's little sign of Merrill's 40 hires yet. However, action is expected soon, particularly at BarCap where heads of division are now in place.

"As flows increase, we're expecting headcount additions in client service teams which took a battering at the end of last year," says Andrew Morland at Pelham International. "But right now banks are focused on business critical hires, which are not wide spread," he adds.

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