ECM recruitment has been picking up in Tokyo. Question is: will it stay that way?
Warwick Pearmund, a consultant at Slate Consulting, says although ECM “got hammered” in the downtown, firms are now in a position where they need (and are looking) to hire again.
Dan Weston, an investment banking specialist at t2 Tokyo, says he saw an uptick in ECM hiring in the first half of the year, mostly for junior bankers to handle increased equity offerings. “Certain sectors in particular have seen increased need for ECM bankers with derivatives knowledge and relationships,” he adds.
But Weston doesn’t believe the rest of the year will be as bright. “Deal and hiring activity has slowed and most bankers expect a challenging remainder of the year in the primary markets in Japan.”
Pearmund is more optimistic about Q3 and Q4 hiring. However, he does point to a shortage of available ECM candidates on the market.
While it’s a challenge to convince senior bankers to move in the current environment, there is also a dearth of junior level talent around. When the downtown caused heads to roll, many younger ECM employees headed to other job functions or other industries.
“Even at the junior level there aren’t many people about. Finding someone with even a year’s experience of ECM is really difficult,” says Pearmund.
That’s not the only issue with finding talent. Weston says many foreign firms find it difficult to compete on fees with the domestic leaders in the equity market. At the same time, with Japan losing ECM bankers to Hong Kong or to other sectors, domestic firms are looking to import skilled bankers from foreign houses.