UBS should seduce cheap Credit Suisse bankers before they fly
Now that Credit Suisse's investment bankers won't be migrating to the halcyon uplands of Michael Klein's CS First Boston fantasy after all, they have two options: hang on in the hope of slotting themselves in at UBS, or try to find a job elsewhere.
As we noted yesterday, Credit Suisse bankers are actually pretty popular on the market and, hiring freezes aside, various banks are queuing up to hire them. "It's very opportunistic," says one London M&A headhunter. "If there's a really good person at Credit Suisse that you want and have coveted, you are going to be talking to them now - not least because their buyout has evaporated, and you can save millions."
UBS may want to take note. Although Credit Suisse lost 69 of the best managing directors in its investment bank in 2021, it still has plenty of good people, and in Europe especially, many are now feeling flighty. "We're getting a lot of calls from clients asking us to identify the top people at Credit Suisse," confirms another London headhunter. "This is an opportunity to recruit really high calibre people who aren't usually available."
Those calls are being taken. By all accounts, Credit Suisse people want to get out. Anecdotally, they are already tuning out and haven't been turning up to some client meetings.
This should matter to UBS. As the charts below, based on figures from Dealogic, show, Credit Suisse's global M&A revenues were historically higher than UBS's in many key sectors. Last year was tough, but Credit Suisse was still stronger than UBS in major sectors FIG, healthcare, utilities and food and beverage M&A. It was strong, too, in leveraged finance and financial sponsors. If UBS wants to keep Credit Suisse's best people, it needs to act fast.
Dealogic's figures reflect Credit Suisse's regional superiority over UBS. In the US, for example, Credit Suisse's broad investment banking business made $818m in revenues last year versus just $279m at UBS. In South East Asia, Credit Suisse made $105m versus UBS's $24m.
The biggest overlaps between Credit Suisse and UBS bankers are likely to be in London and Switzerland, and it is here that headhunters say Credit Suisse bankers are the most keen to find alternatives. Uncertainty over their future at the combined entity is likely to persist for months - UBS has indicated that the deal won't close until the end of the year at the very latest. "First, everyone will move across and then they will start cutting," says one insider, who works with UBS. "The risk is that a lot of people will leave in the meantime."
While senior bankers at Credit Suisse can make a case for their superiority over their UBS rivals, analysts, associates and VPs face a much harder sell. "If you're a junior or mid-ranking banker you don't have a franchise and are simply duplicate talent," says one headhunter. "It's going to be a nightmare for people at that level."