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Why MS bankers should stick with MUFG

Morgan Stanley bankers looking to avoid the conservative culture of Mitsubishi UFJ Financial Group (MUFG) , their new joint-venture partner, may be out of luck. The job market in securities isn’t strong, so MS staff might be better off staying put.

The two firms are forming a securities joint venture by the end of March next year which will combine Mitsubishi UFJ Securities and Morgan Stanley Japan Securities.

The two businesses will operate as a single joint venture, with ownership split 60-40 in favour of MUFG and reflected in a management team drawn from both companies.

The venture’s retail business will be headed by an MUFG official, but the Wall Street Journal reports that in an effort to prevent a talent drain, the institutional side will be run as if it’s an entity of Morgan Stanley and will follow the US firm’s global policies on pay, promotion and retirement.

That could be comforting news for some staff on the Morgan Stanley side. If they did want to jump ship to avoid the traditionalist culture of MUFG, they might not have many places to go in the current market.

Hiring for back and middle-office securities roles in Tokyo has largely been reduced to business critical and replacement roles only, says Jennifer Mertens, a senior consultant at recruiters Talent2 Tokyo.

And although Mertens says some securities firms are recognizing the opportunity in the current market to upgrade their talent and are putting out feelers discreetly, there is a continuing trend towards shrinking middle and back-office teams in Japan, with hubs in Hong Kong and Singapore taking up more responsibility for the region.

Things don’t look much better up front either. Nao Batangan, a financial markets recruiter at Michael Page Japan, says job opportunities for traders in the secondary markets remain scarce. “Some traders who are more quantitative are even retreating to positions in the back office, such as market risk, where there is some demand,” he adds.

Batangan also says there have been redundancies from proprietary trading desks at firms that can’t afford to take on risks or leverage their balance sheet any more, although he does offer some words of encouragement: “For the really talented prop traders with successful track records, particularly those involved in high frequency strategies, there can be good opportunities in the global hedge funds.”

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