The exact nature of President-elect Donald Trump’s eventual relationship with Wall Street is still an open question, but whatever he does will hit financial services and this will have a knock-on effect on your job prospects
Financial services recruiters are actually quite upbeat – here’s why.
Investment banking under Trump
Trump could hit the investment banking divisions harder than most. Already he’s suggested that he might block Time Warner’s acquisition of AT & T and Goldman Sachs says that earnings of M&A focused banks could slump by 20-30%, while uncertainty around Trump’s policies could mean that deals are put on ice.
Certain groups and industry sectors will benefit, whereas others could suffer.
“It’s weird that he got elected, and it’s weird that nothing’s happening,” said Cesar DeLara, senior consultant in the investment banking practice at Selby Jennings “Trump winning the election doesn’t really do much in terms of investment banking hiring at the moment if these indexes don’t move, although oil and gas and retail industry coverages will see action, because the Republican party favors oil and gas and coal, natural resources such as fossil fuels, not necessary renewable energy.”
DeLara noted that over the last few years there has been a lot of demand for renewable energy bankers, with investment banking divisions adding a lot of headcount in that industry sector across the board, including this year leading up to the election.
“I’m not sure that will continue, especially with a Republican president – it may still be the case that renewable energy is a hot area – but hiring for the [IBD’s] industrials desk will be picking up as well given that Trump leans toward favoring that sector,” DeLara said.
Another area to monitor is the affect that Trump’s election win will have on the Federal Reserve’s thinking, which could impact investment bankers on the mergers-and-acquisition desk.
“Will Trump be able to hold off the federal interest-rate hike, which would lead to a more favorable arena for M&A, or will it get raised in December?” DeLara said. “Trump’s election may cause the Fed to hold off that interest-rate hike.”
Rumor has it that for Treasury secretary Trump wants to appoint his finance chairman Steven Mnuchin, whose resume includes Goldman Sachs, Dune Capital Management and OneWest Bank, the latter now part of CIT Group. He also produced films such as the X-Men franchise, Avatar, Suicide Squad, American Sniper and Mad Max: Fury Road. Maybe that will be a boon for media and telecom investment bankers.
The buy-side under Trump
In particular, macro-oriented investment firms, including long-only asset managers and hedge fund managers, will be looking out for currency and commodity fluctuations in the coming days and weeks, according to Anthony Keizner, a partner at Odyssey Search Partners, a recruiting firm.
“They’ll be looking for opportunities to benefit from that [volatility],” Keizner said. “Once the dust settles, and the initial surprise has been factored in, a pro-business president should be good for the markets.
“I don’t imagine funds will change their immediate hiring plans, but a period of stability that lasts into Q1/Q2 2017 could well precipitate a growth in hiring, given that this year that has been so muted due to asset redemption and weak performance,” he said.
“With [SkyBridge Capital founder Anthony] Scaramucci on Trump’s finance team, the alternatives industry should also benefit from having an insider so close to the president.”
Following the markets’ initial negative response, global portfolio managers will refocus on the fundamentals, come to recognize that new policies will not unhinge the economy – and may help it – and recognize investment opportunities, according to Mickey Levy, the chief economist for Americas and Asia at Berenberg. Valuations will rebound, he said.
Trump is a big positive for the wealth management hiring outlook
Mark Elzweig, the founder and president of Mark Elzweig Company, an executive search consultancy, believes that a Trump presidency is a strong positive for hiring in the wealth management industry.
“The current Department of Labor seems intent on micromanaging brokerage firm recruiting policies and has just issued a dictate that will require firms to restructure their payouts,” Elzweig said. “Trump will bring in new people with a more business-friendly outlook.
“If Hillary had won the election, then regulators would had continued to impose more rules on brokerage firms that would have limited their ability to make their own business decisions,” he said. “While Mr. Trump’s policies have yet to be determined, he’s more sympathetic to fellow business people and will likely craft policies that will allow firms to make their own business decisions.
“This will inspire confidence and lead to more hiring of both experienced and new advisers.”
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