2012 has been a harsh year for investment banking redundancies. While there may not be much sign of the 160,000 banking redundancies suggested a while back by Reuters, plenty of people are still out of the market and it is not at all easy to get back in again. Yes, banks are still stocking up with juniors, but they seem to have little appetite to hire in experienced staff.
New figures from the FSA Register in the UK, provided by research company IMAS, reveal that in London at least there's been very little recruitment of senior or experienced people since October. Among the biggest hirers of FSA Approved staff (namely people undertaking one of several controlled functions) in the past two months have been JPMorgan, Barclays, Standard Chartered and BNP Paribas. However, almost all the staff newly registered at these firms are junior bankers without prior experience of working elsewhere.
JPMorgan, for example, has registered 25 people in London since November, up from 13 last year. But none of JPMorgan's new London bankers appear to have worked in financial services previously. BNP Paribas has registered 14, including Jonathan Warburton, the new head of banking and corporate finance for EMEA who joined from Rothschild in November, and Sean Williams who left RBS in September. However, the rest of BNP's recent hires haven't been registered with the FSA before.
The appetite for juniors looks like bad news for more senior bankers who are trying to find new banking jobs.
"We speak to people who are out of the market all the time," says Russell Clarke, founding partner of fixed income focused-Figtree search. "Some people who've been sitting out for six months or so are now deciding to look at what's on offer for next year. Many of them are very talented and put their hands up for voluntary redundancy."
The good news is that one large bank does seem to be picking up experienced people, even including some who haven't worked in banking for some time: Standard Chartered. Since November, it's hired Ashley Fox - a trader who was previously registered at JPMorgan in 2010, Michael Trounce - a strategist who left JPMorgan in October 2012, Vlad Gogolitsyn - a repo trader from BNP Paribas, and Russell Chin - its new head of equity sales, who was previously with Nomura.
Gary Goldstein, founder of US search firm Whitney Partners, says experienced bankers are finding new jobs, but only if they fulfill certain criteria. In reference to M&A and capital markets bankers, Goldstein says: "The key is having significant relationships in verticals that are going to be active over the coming years." Which are these verticals? Right now, Goldstein says his US-focused searches are mostly in healthcare, energy, financial institutions and some areas of the consumer space.
Experienced M&A bankers who come back into the market time away have usually kept their relationships warm, says Goldstein. Working in a strategy role for a corporate is one way of doing this, he suggests. M&A bankers who do return to the industry are eschewing big banks and going for boutiques and advisory houses like Greenhill, Perella Weinberg, and Centerview Partners, Goldstein adds. These advisory houses will hire people with strong relationships even if they've spent years out of the market. Perella Weinberg, for example, hired Chuck Ward in March 2012, even though Ward left Lazard in 2010. Similarly, Perella hired veteran M&A banker Joe Gatto in October 2012, although Gatto retired from Barclays in 2011.
"Hiring people out of the market brings big advantages," says Goldstein. "They're more affordable. People who are in work have so much deferred stock that it's very expensive to buy them out."
In London, Clarke says some of the fixed income salespeople and traders who are mulling a return to the market will be in luck."Fixed income has performed well this year. Revenues have been higher than last year and people are feeling more confident about recruiting decisions and making use of the higher value candidates who have been sitting out of the game this year to upgrade their businesses.
"There's certainly no build-out," Clarke adds, "but it feels a lot more buoyant than it did 12 months ago and critically the benefit is that you buy in value without taking on the deferred cost"