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EDITOR’S TAKE: Places to sit it out

After long deliberation on an appropriately wet morning, here is our (latest) definitive guide to where to hide if you still want to be assured of having a job in 12 months’ time.

1) Mid tier and boutiques (except Singer & Friedlander): With the number of big banks falling faster than Dick Fuld’s list of friends, boutiques and mid-tier firms should fill the gap. Keefe, Bruyette & Woods are the latest to say so – yesterday they produced a research note claiming “‘The 100-Year Storm’ has created unprecedented opportunities, in our view, for the mid-tier firms to add breadth and depth to their businesses both domestically and abroad….” Who are these “boutiques”? KBW’s US-centric list includes Lazard, Greenhill, Evercore and Jefferies. We’d add Rothschild. Singer & Friedlander is the obvious exception, what with being owned by Kaupthing.

2) Mezzanine: Mezzanine financing wasn’t big when credit was flowing freely. It’s getting bigger with leveraged funds now out of the picture. Dow Jones says US buyout firms and corporations raised a total of $24bn in the first half of 2008, up from $2bn in the first half of 2007.

3) Tax accountants: In the absence of total anarchy, governments will always need cash. Last week, PricewaterhouseCoopers said that global tax planning is the way to go.

4) Anywhere to do with renewable energy: We’ve written about this already this morning. Suffice to say: global warming, UK gas shortages, carbon taxes, free wind.

5) Restructuring boutiques: Think Houlihan Lokey, Close Brothers, Rothschild. They don’t employ many people. They’re not that busy yet. They will be soon.

6) Investor relations functions: As long as corporates exist, they will need someone to explain what’s happening to their share price to investors. If the share price is plummeting, this will be all the more necessary.

7) Volatility trading: With the Vix higher than it’s ever been before, now’s a good time to be trading volatility. Bloomberg says volatility traders are having their “best year ever”.

8) France: France may be officially in recession, but neither BNP Paribas nor SocGen are doing too badly. The country also has punitive labour laws which means that once you’ve got a job it will be hard to get you out of it.

9) Pensions insurers: Corporate pension deficits are back and offloading pensions obligations is catching on. Financial News says pensions insurers are gearing up for a “hectic autumn”.

10) Litigation lawyers: The Financial Times is predicting an ‘avalanche’ of credit crunch related lawsuits.

11) The state: The US government is already looking for asset managers to help orchestrate its $700bn rescue fund. The UK government may soon need a little help of its own.

12) The IMF: It hasn’t been very active in the financial crisis so far, but Iceland’s near-meltdown is a reminder that the IMF is there, sitting docilely in the background. It likes to hire economists.

13) Debt collection agencies: UK consumers are more indebted than any group of people in the G7 ever. Debt collectors may not be paid as much as bankers, but they will be busy.

14) McDonalds: The Dow plummeted yesterday, but McDonalds didn’t. That kind of resilience is saying something.

Comments (24)

  1. Nah, subway or boost are where it’s at.

  2. “Editor’s take: Places to sit it out”

    Sarah –

    Have you learnt nothing from this credit crisis debacle? There won’t be any “sitting it out” anytime soon. The nature of the financial industry is changing before our very eyes. The banking sector as we have known it is gone – forever. Over the years something new will take it’s place and by the time there is boom in that area most of us will be too old to get into it.
    Sarah, be more genuine. People will appreciate you more and you will gain more readers to efinancialcareers.

  3. Hi Andrew, I’m trying not to be excessively gloomy. However, a genuine appreciation that banking won’t ever be the same again underpins the fact that there are hardly any investment banking jobs on the list.

    Sarah, Editor, eFinancialCareers Reply
  4. Hi Sarah, be careful with Mezzanine. While it is a very attractive asset class, a lot of the 2006/7 vintage is not of the highest quality and the prospect of defaults which would impact mgmt fees and the ability to maintain staff is ever present. As well, there is a lot of difficulty in raising both debt and equity as a number of funds are fund raising, leaving the long term future a little chequered.

  5. How about Moody’s Structured Finance department. Thats a sleepy backwoods if ever there was one. Better still get a desk within their monitoring department. As everything in ABS, CMBS, and CDO is bust there is nothing to do other than to clock watch until 5:30pm.

    Stephen Roughton-Smith Reply
  6. Atlernative energy touches the atom, experiment at your risk or until the gov starts the old scared straight programs

  7. Why no private equity on the list? Funds with cash could be about to have a great couple of years!

  8. Guy, the difficulty in getting leverage and the cost of this leverage is 1 reason. As well, there will be a reluctance by current owners to sell at lower than purchase price multiples meaning the market may not be that large going forward. However, agree for mid mkt deals, there are excellent opportunities.

  9. I think career wise the six months will be interesting to say the least! I think that some of the above remarks are a bit harsh but then again who really knows. Sitting it out is a bit of a dangerous phrase as I wouldn’t want anybody working for me who was sitting it out and I’m sure efinancialcareers would want place a “sitter outer” to any of its clients, particularly at 400/ job posting??? I do however see where you’re coming from! If you’re going to leave the country then head for Dubai or India (language barriers) where there significant opportunities!
    Anyway for all those “ballsy” traders out there from large banks why not try your hand at one of the volatility trading firms (lots of small firms around the city) who are always open to hiring driven individuals, however if you don’t perform its game over, FAST!
    I think that if everyone runs around screaming its not going to help we all know we’re in the **** and we just need to focus and turn difficulties into opportunities!

    Well that’s how I see things………… Good Luck

  10. ‘Sitting it out’ as in ‘doing nothing’ wasn’t exactly what I had in mind. A more appropriate title would have been ‘Jobs that will survive the downturn.’ Too late to change, but that was the sentiment.

    Sarah, Editor, eFinancialCareers Reply
  11. Well I thought it was funny Sarah, so you have one fan here. Then again my relaxed attitude might be because I am in the middle East in the middle of an underleveraged property boom!

  12. Well, McDonalds has nothing to do in this list as a financial related job except if it is here to illustrate the arrogance and condescendance of the people of the financial sector towards less prestigious jobs.
    In reality, economic laws are eternal and human vanity also. When you lend money to people who can’t pay back or on the back of overvalued assets, no matter the level of sophistication you add to spread the risk or make this kind of business last longer, you will end up learning again the laws of gravity.
    So maybe the best job now is to be a physicist.

  13. Why not Actuarial baby! With an aging population, ya can’t go wrong!

  14. The landscape in Investment Banking will fragment into verticals and there you have listed some but, the more fundamental question relates to underlying economic factors and how that will effect GDP.

    The industrial, processing, fabrication and other fundamentals will survive the downturn and as per your example with McDonalds, probably profit from USD fluctuation in regard to emerging markets (HKD, JPY, etc…)

    The majority of the UK GDP is built on these services and for every pound earned in services, 6 are spent elsewhere indicating that for each services jobs that is cut another 6 will follow.

  15. Andrew, don’t overplay your hand. Even if every investment banker was made redudant tomorrow, you’d all still need toilet paper, and that means people to make it, drive it to the store, sell it…. there’s life after finance… I just want the b*tards who I worked for to stay solvent long enough for them to pay what they owe or for me to sue the bejeezus out of them.

  16. Sarah is just trying to help out those who have reacted in the “rabbit in your headlights” sort of way. It is a good first list for people who only see carnage about them. These “sit it out’ jobs can be good career moves for some. A friend of mine did this in the dot-com bust and while the money was not the same, he thought it was a good trade for the work-life balance and continued.

    A warning about India – information and transperancy levels on deals are lower and a good “gut-feel” for things helps ! Mumbai is the typical destination for an investment banker – however be prepared for a compromise on quality of acco and VfM on rents. Those used to the good life – Dubai or Singapore might be a better place to look.

  17. This article is aimed at people with experience.

    Sarah, I’d like to see an article detailing outlook and job prospects for those of us that are fresh of the ranks from uni. Some HH have said that, being fresh and more easily molded, new comers may find some opportunities that experienced people from different areas may be overlooked for.

    What about all the MFE/MBA students who are in their final 6 months, or just starting out. Outlooks for this crowd would be interesting, even if the outlook is `change industry’.

  18. What do people think the future for traditional long only fund managers is? Given there have been highs and lows in the markets before without huge redemptions and have survived, whilst they dont have the issue of leverage the HFs have and are paid fees on AUM rather than performance…..would this area not be relatively safe??

  19. Take a look at foreign exchange. Seriously.

  20. And Shariah finance. No excessive leverage there.

    Shakin Stevens Reply
  21. What about the change management folks? Amongst the first to go and amongst the most industry mobile. As I have said before, wait for the Derivatives specialist programming radar for BAe. The problem will be when the regulators start demanding major change and new regulations ….. and all the change agents have left the industry. One project is mauch like another in terms of structure and approach, the difference perhaps being that in outside industry, the change has bigger budgets and is more complex. It seems obvious to me that a lack of change people could threaten industry recovery just as much as a lack of liquidity in the market.

  22. bankers losing their job…good riddance

    overpaid…overhyped…over indulged

    And don’t bother with the you are just jealous comments – i couldn’t be less jealous of the politics, stress, strain on social life and general lack of fulfillment from the work you do.

    Looking back at life spent as a banker, would not be pleasant in the final years!

  23. Re 14): a Big Mac is what economic theory calls an inferior good, its demand rises when income falls. That would explain McDonald’s performance.

  24. I suggest all the bankers who can’t get a job go and work in McDonalds before they irritate us any more with their moaning

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