US
Ratings agencies have had both their reputations and balance sheets battered by the financial crisis, but for the first time in two years there are signs things are looking up. And the big players are tentatively re-building their teams once again.
Standard & Poor’s has just reported its first quarterly rise in revenues in two years, while Moody’s has issued a bullish statement about 2009 earnings expectations (despite posting an 11% year-on-year decline in earnings for Q3).
A surge in both investment grade and speculative-grade corporate bond issues recently have helped bolster revenues. S&P’s says in Q4 it expects: “double-digit increase from momentum in corporate issuance”.
Russell Clarke, director of executive search firm Mantis Partners, says: “Ratings agencies cut aggressively, focused on operating efficiency and also suffered high levels of staff departures. Now that the market is stronger, it’s natural they should be looking to hire again to meet client demands and realign themselves.”
Ratings agencies were swift to announce redundancies, but both S&P’s and Moody’s (and to a lesser extent, Fitch) have a decent number of job opportunities at present. Moody’s has also increased operating expenses, mainly due to “higher accruals for incentive compensation reflecting the stronger full-year outlook.”
Nonetheless, a spokesperson for S&P’s tells us: “Current hiring is in line with normal recruitment patterns, not the result of expansion.”
Interestingly, though, S&P’s has three new roles within its London-based structured finance division, which suffered particularly badly in the downturn.
But structured finance revenue at both S&P’s and Moody’s remains weak, with the majority of activity coming from TALF related securitizations in the US.
It may instead have something to do with the anticipated regulatory requirements coming from the European Commission, expected to come into force in the fourth quarter of 2009. Ratings assigned to structured instruments will need be differentiated from those given to other types of securities.
Moodys is in a similar situation re morale and people looking to leave and there isn’t a long queue to join either..
Were they not in the top 10 best companies for bonus compensation?
These firms are awful at hiring. They employ poor calibre people in their HR teams and are staffed by over officious nincompoops. These are the firms that played a massive part in the near downfall of capitalism. You would think they might show some humility. The problem is they all think they are so bloomin clever and clearly they are not. Avoid like the plague unless you are desperate.
Any experiences on S&P Frankfurt?
What type of salary and bonus a rating agency offers for an associate / senior associate in London?
bob, the fundamental issue is not any particular office be it London or Frankfurt. In my opinion, the real issue is the management and how awful it is. Even if you work with good people in the Frankfurt office, you still have to deal with the bureaucracy in Europe and out of New York. This is why almost without fail when people have the first chance to leave, they do leave. I don’t know many people happy there.
rodney! you plonker!
Dnt go there…associate you will get 50 with no bonus.
Rodney is not completely right …some people are happy…but very few actually… some managers over there are making 120k + dont know anything and leave at 5pm every day! this is life guys
sweat shops.
If you go senior you’ll get ok basic and ok bonus (not IB standard) but you will not be working very hard and certainly not imaginatively. You’ll just end up managing other people. Not all of the raters are muppets and some departments do a decent job but in general they have a very inflated opinion of themselves – as long as the monte carlo simulation spits out a number they go with that rather than aligning it to the realities of the world – if you are junior go for 2 yrs learn and then leave