You know it’s an M&A boom market when execution-only M&A roles start to proliferate like bankers on the beach. In the first half of 2015, global M&A reached its highest level since the first half of 2007. And execution-only jobs are popping up everywhere.
Goldman Sachs is currently advertising for a ‘financial sponsors execution specialist’ in New York. J.P. Morgan Cazenove has been advertising for execution only corporate finance specialists in London. Morgan Stanley has got an execution only team in Europe. And BNP Paribas has been hiring for its London-based corporate finance ‘execution team.’
Needless to say, execution teams ‘execute’ deals. While this can be a good thing if you’re looking for a big deal list for your CV, recruiters say it’s less of a good thing if you want to stay employed when the M&A pipeline runs dry and the M&A boom comes to an end.
“Execution only roles are the first things that get canned when the cycle turns,” says one M&A headhunter who’s worked across multiple cycles. “They’re the fat. In good times, banks hire people to execute deals and in bad times they don’t need them any more.
“UBS’s execution team had about 80 people in it in 2007,” he alleges. “Now it’s a fraction of that.”
Andy Pringle of recruitment firm Circle Square is similarly lukewarm on execution only. “You’re more employable if you’ve got execution and origination skills. In a downturn, banks look for people who can work across teams,” he says.
Nor is it just about execution and origination. Pringle says it’s also about working on buy-side M&A deals and sell-side M&A deals. “Buy-side M&A and sell-side M&A are a completely different skill-set,” says Pringle. “You ideally need a mixture of both – although you don’t want to do as much buy-side because there are usually multiple bidders for buy-side deals and you’re less likely to get execution experience.”
Neil Thwaites, managing director of industrials, infrastructure and business services at Rothschild says the bank mixes up its origination and execution teams and that its juniors therefore get a broad range of experience: “Unlike some large banks, we don’t have separate marketing and transaction execution teams. Instead we all offer the full spectrum of marketing and execution services. When we go and pitch for business we are also personally responsible for ensuring that deal is done.”