What summer lull? Some people might be heading to the beach, but recruiters say the hiring of M&A bankers is continuing apace on Wall Street, with associates and vice presidents (VPs) at the top of banks' lists.
James Lee, a senior recruitment consultant in the investment banking practice at Selby Jennings, says the recruitment of juniors and mid-rankers is being driven both by demand from international banks and increased demand for talent from firms dealing with the middle market. Think William Blair and Robert Baird. Also think of the likes of Nomura, Rothschild and Deutsche – all of which are bolstering their U.S. M&A teams this year.
Piper Jaffray’s healthcare practice has been hiring M&A associates and VPs to support the deal execution efforts. They do not require healthcare experience as long as candidates have M&A execution backgrounds.
There is a similar situation at SunTrust Robinson Humphrey – they are hiring M&A VPs into different industry groups because they are reportedly inundated with deal flow and need to bring on bankers with substantial M&A execution experience at the VP level.
In addition to industrials, Lee says the hottest sectors for hiring are utility/energy/oil/gas and healthcare. The marketshare of U.S.-targeted deals in these sectors is up year-to-date from 15.3% to 22.3% and from 16.1% to 17.7%, respectively, compared to this same period last year according to Dealogic. Rothschild has hired U.S, MDs in healthcare, technology and industrials, for example, Deutsche has strengthened its U.S. healthcare group. It also hired in Bill White from Citigroup to be the head of its U.S. life sciences group last month.
In some cases, talent is hard to find. "Healthcare groups are hiring people with general M&A experience, as well as candidates with biotech and science backgrounds, where they’ll hire PhDs without banking experience," says Michael Brothers, a manager in the investment banking practice at recruiter Michael Page.
At VP and associate level, recruiters argue that the talent pool is driven by candidates who want to move into the right sector team. Below this level, most M&A bankers at large banks sit in generalist teams, but at VP and above bankers become specialized. If you switch banks at this point (either to a big bank or a sector-specific boutique), it's easier to determine which sector you'll end up in. And unless you switch while you're junior, you won't get the chance again.
“At director level and down, people who leave to make a lateral move, often it’s because they want sector specialization,” says Brothers. “From a bank’s perspective, a healthcare team is interested in a generalist M&A candidate because they have a strong M&A transaction background and can plug-and-play on these deals.
“If you're a generalist M&A associate coming up to VP or a VP coming up to director, then you need to specialize, because that will only take you so far before you'll need to become a coverage officer, and if you’re not specialized in an industry, it’s tough.”
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