No longer the pariahs of the banking job market, equity researchers are hot property again. Many of them even got higher bonuses.
Financial News reports that ‘entire teams’ of researchers are being pinched for commodities equity research positions, and that Collins Stewart is hiring for equities research sales and trading.
Recruiters say Macquarie is also persisting with its equities push, which is expected to see it amass 35 researchers in Europe.
“Hiring is still strong,” says Zaki Ahmed at research-focused search firm, Sammons Associates. “There won’t necessarily be much growth at the big banks in 2008, but we’re expecting to see a few places upgrade.”
Emma Halls, director of recruitment firm Finance Professionals, says research hiring is likely to remain strong in sectors like oil and gas, natural resources, infrastructure and construction.
It’s not all good news, however. Halls also says hires into other research sectors are being classified as non-critical and junior openings are liable to be shelved. Citigroup, meanwhile, is said to have made some of its equity researchers redundant last month.
Nevertheless, it’s a far cry from 2005, when equity researchers were the dogs of the job market and a third of the redundant banking professionals passing through the door of one outplacement provider were of equity research ilk.
Researchers’ revitalisation is underscored by the emergence of a new breed of research superstar, such as Oppenheimer’s Meredith Whitney and Goldman’s William Tanona, examples of what the Wall Street Journal describes as ‘Told Ya So’ analysts who accurately called the credit crunch.
And while the structured credit types who were the darlings of the dog years for equity researchers are turfed out, recruiters say equity researchers have been collecting big bonuses.
“Bonuses were pretty good overall,” says one headhunter. “All the big houses paid in equity research – Morgan Stanley was up 10%, Goldman was up 15% and Merrills was up around 10%. The only real surprise was Lehman, which was down an average of around 20%.”
The UK head of one European bank confirms equity researchers were paid handsomely: “What you saw this bonus round was a real focus on the best research and the best analysts. The buyside will pay for research from people who have a real franchise and there’s strong competition for those individuals. You’ve seen a real pushing of the bonus pool to accommodate that.”