Following our recent article about the lack of debt capital markets (DCM) originators, we thought it was only fitting that this week we focus on the hiring trends of investment banking’s current golden child – equity capital markets (ECM).
The flood of initial public offerings (IPOs) over the past few years has seen several domestic ECM teams generate higher fees and revenue than their advisory or DCM counterparts.
According to the ASX, approximately 400 private companies listed on the local bourse during 2004 and 2005. And it looks like this trend is not waning – ten companies have already listed this calendar year and the IPO pipeline remains robust.
Despite the recent success and popularity of ECM, physical team sizes are relatively small. “With the exception of UBS and Macquarie Bank, teams vary between three to six members,” says Angus Price, a consultant at Sydney-based search firm Derwent Executive.
Over the past few months, however, investment banks have been hiring ECM staff. At the moment, Price is looking to fill an associate role at Citigroup, one the leading ECM players in the local market.
In contrast to the shortage of DCM professionals, Price says he has already received a favourable response from applicants to the role. He adds that suitable candidates should possess strong financial skills, a solid knowledge of equity markets, a good academic record and a positive career track record over the past three to six years.
Price says that experience isn’t restricted to ECM and candidates from a related field such as corporate finance law or M&A would be considered.
Salaries: it’s all cyclical
At this stage in the market’s cycle, strong demand for ECM has resulted in significantly higher than average bonuses for ECM professionals. In terms of base salaries though, Price says that M&A and ECM salaries are similar. The below table highlights current base salary ranges:
- Analyst: 100,000 – 130,000
- Associate: 140,000 – 160,000
- Vice President: 180,000 – 250,000
- Director: 250,000 – 350,000
- Managing Director: high-300,000s – mid-400,000s
ECM POSITION / RANGE IN A$