Everyone else may be heavily occupied with watching paint dry, but financial institutions group (FIG) teams are BUSY. According to Thomson Reuters, FIG-related deal activity was on a par only with energy and power in the first nine months of this year.
Unfortunately, no small amount of this activity has been undertaken on behalf of governments. The Wall Street Journal points out that year-to-date investment in financial institutions by the machines of state totals $76bn.
As a result, banks’ FIG teams are unlikely to be remunerated excessively for all their hard work – the US Treasury, for example, caps advisory fees at $95k.
“No banks are hiring FIG people this year and existing FIG teams are flat out,” says one corporate finance headhunter. “If you don’t have a decent team in place already, you won’t get mandated on the kinds of deals that are on offer at the moment.”
Fortunately, there are still FIG jobs out there somewhere. Headhunters say restless FIG bankers may be able to move into private equity. Undaunted by JC Flowers’ recent 30% markdown on financial services investments, other funds are said to remain keen to follow in its financial services footsteps. CVC, for example, is said to be spending 3bn on a 51% stake in the insurance business of RBS. And Permira is said to be looking for a head of FIG.
However, most fund hiring appears to be at the junior end. Abid Hussein, head of the financial services team at recruitment firm EM Group, says private equity funds’ appetite for junior FIG talent is “very strong”.
“Funds want an army of individuals to perform the analysis behind these deals,” says Hussein. “Cash flow models in financial services are very distinct, so specialist FIG talent is highly sought after.”