For most real estate bankers, life since 2008 has all been about loan restructuring as banks try to manage challenging lending cases whilst correcting their overexposure to property. Not since the early 90's has there been such demand for workout bankers.
Yet by nature, these restructuring roles have finite shelf lives . As the volume of complex cases is reduced and banks begin to offload assets into the marketplace, what does the future hold for real estate workout bankers?
If the recent increase in the volume of relationship management and origination vacancies is anything to go by, perhaps banks will redeploy everyone back into the front office and we'll all wake up and think the last couple of years were a bad dream? However, with the major banks shrinking their real estate balance sheets and some international players pulling out of the market altogether, this seems unlikely.
Where then, will opportunities be for workout bankers in future?
The most likely scenario seems to be a balance between jobs in relationship management, origination, portfolio management and credit risk management.
For the real real estate finance high flyers, there have been and will continue to be opportunities in mezzanine finance on the buy side. But such firms are small and hence recruitment volumes are low.
It will be interesting to see the impact that international pension firms make on the market from a senior debt lending perspective as this will directly affect their ability to hire in the UK. A couple of the major players already have senior debt and mezzanine funds in the UK and have hired sporadically.
Question marks remain around the future of securitisation and whether job opportunities will present themselves any time soon in this market. There were a few high profile appointments last year in securitization, but these people were mostly hired to manage residual CMBS and RMBS books down. There is hope, however: one major European bank is near to closing the first securitisation of its kind in years, but hiring seems unlikely for the next six months at least.
For the moment, workout bankers have nothing to be worried about. Their immediate futures in restructuring are assured: there are still enough challenging lending cases to keep them employed well into the future. Nevertheless, moving back into the front office can't be taken for granted - particularly after three or four years of dealing with nothing but challenging loans.