Advertise for a VP or SVP role and you expect applications from investment bankers who are working their way up the career ladder. But that’s not always the case these days – headhunters in Asia say they are receiving a handful of CVs from MDs who are applying for more junior positions.
Large investment banks have cut senior staff in Asia, and a poor recruitment market has left many of them out of work for months. For some, a downwards move is an option. “I’ve had front-office MDs call me from Europe about fixed-income finance manager jobs in Asia,” says Pernille Storm, managing director, ALS International.
She has also seen a few unemployed Asia-based MDs apply for VP-level positions. “They want to get back into a job as there aren’t many MD roles available. Not many firms are expanding their senior headcounts, and when vacancies do crop up, firms always promote internal mobility first.”
Unfortunately, such candidates usually receive the classic “too experienced” response, or worse. “It does not put them in a positive light that they apply for roles so far away from their core skills and level of experience,” says Storm.
Annie Yap, director, AYP associates, adds: “While an MD to a SVP or team-leader job can sometimes be a realistic move, the person has to prove they can still roll up their sleeves and still do this type of work. Banks will question whether they are too used to giving orders from an ivory tower.”
Too many cuts
Senior investment bankers are being cut primarily to reduce fixed compensation costs, which have risen to levels not sustainable given banks’ falling income from stock and derivatives trading. “Starting about three years ago, banks added part of the normal bonus portion to MDs’ base salaries to minimise the bonus payout. This has now put a lot of cost pressure on the institutions – especially when fee income is falling,” says Storm.
Hong Kong, as a large investment banking centre, has the taken most of the MD cuts in Asia, while Singapore has stayed comparatively immune thanks to its dependence on the more resilience wealth management sector. The redundancies began in early 2012 at BoA Merrill Lynch, and have continued throughout the year at firms from Deutsche Bank to Nomura. Credit Suisse and UBS are also expected to reduce their Hong Kong headcounts soon, according to a senior recruiter there who asked not to be named. The more recent cuts come as banks seek to preserve their bonus pools for high performers.
Yap reckons most unemployed MDs will allow themselves about three to six months of searching for a role equivalent to their previous position before they explore options like joining or starting hedge funds.
The likes of Rothschild and Lazard are also sought-after destinations. “Smaller banks and boutique advisory firms, who focus on the small to medium-size deals, have been fortunate to pick up excellent bankers in the past years due to the general market changes,” says Storm. Stanley Teo, director, Profile Asia, agrees: “Most MDs would not have an issue working in a boutique. Sometimes they welcome that challenge.”