With the exception of places like Evercore and Rothschild, it's not proving a great year for M&A. At Deutsche Bank, advisory fees were down 17% year-on-year in the first six months of the year. At UBS, they were down 43%. At Morgan Stanley, they were down 37%.
This is causing concern among all the M&A analysts who'll be paid bonuses over the next month. Firstly, they don't expect to be paid very much. Secondly, they think they might lose their jobs.
"There are rumours that places like Citi are firing 10% of their analysts every three months," says one recruiter, who stresses this is merely a rumour. Another says he's seen analyst CVs flowing from JPMorgan and Morgan Stanley, but that it's difficult to establish whether these analysts have been made redundant because they always insist they've left of their own accord. "Most analysts won't say they've been cut. They'll say they've chosen to do something else," he reflects.
In the US, Dealbreaker reports that UBS has been letting go of its first years. It's not clear whether this is going on in London too.
On the whole, however, first and second year analysts who fear severe thinning of their ranks are probably being irrational.
Junior M&A recruiters stress that mass redundancies among juniors are rare and that they don't make much sense financially.
"Not many first year analysts are going to be let go," says Julia Tustian at recruiter Shepherd Little. "They're only earning around £45k and their bonuses aren't going to be amazing. It makes more sense for banks to let go of the expensive senior people."
And yet, banks may take this opportunity to do a little pruning. "The general view is that financial services is still bloated in terms of personnel. Bonus time is a natural opportunity to let go of people," considers Logan Naidu at recruitment firm Dartmouth Partners.
If you are a first or second year analyst and you do fear redundancy and you are cut loose, then what?
It will be a struggle. There is hiring, say recruiters. There's just not much of it.
Cantor might be hiring. McQueen, a boutique, has hired an analyst and an associate this year. RW Baird may also be hiring. Mostly, however, it's dry. There's some talking of hiring in metals and mining and FIG, but it's limited and in pockets, we are told.