When the economy starts to wane, investment banks' restructuring teams are called in. Right now, restructuring is a growing area in the U.S. - and many investment banks are starting to hire.
Mike Brothers, a manager in the investment banking practice at Michael Page, says that restructuring professionals are in-demand. The challenge, he says, is finding people with enough relevant deal experience.
“We’ve seen a lot of traction generally for restructuring mandates at the associate level and some VP hiring as well, for example, at elite middle-market firms like Piper Jaffray, Cantor Fitzgerald and Jefferies,” Brothers said. “Banks such as those are looking at making a few additions to their restructuring team.
“When M&A is down, restructuring is up, as more clients may need that type of advice, and there’s been a good deal of activity coming from the middle-market-focused boutique clients, as well as those banks that are a little more under-the-radar in terms of a brand name,” he said. “Even the bulge-brackets are hiring in those groups too, as are firms that are more of a consulting practice focused on restructuring rather than a pure investment bank.”
When M&A is booming, there is not as much activity in restructuring, because fewer companies have a need for advice on a potential bankruptcy or balance-sheet restructuring, but when you see the market the way it has been so far this year, rather than looking to buy another firm or sell to an acquirer, clients seek advice to see how they can potentially restructure, Brothers said.
The majority of hiring right now in restructuring advisory is mainly through past relationships the candidate has and networking, adds Gary McCool, principal consultant at Selby Jennings.
For more traditional restructuring advisory companies, likeJefferies and Piper Jaffray, salaries are $150k, $175k and $200k for first-year, second-year and third-year associates respectively, and $200k or more for VPs.
“Salaries [for restructuring advisory professionals] tend to fall in line with what other bankers are paid in other groups – they’re making their bonuses off of the fees they generate,” Brothers said. “At smaller consulting-type restructuring firms, the salaries are a little lower and overall comp less rigid, maybe a bonus target in the 60% range, but the tradeoff there is lifestyle.
“Some of the smaller groups try to attract experienced professionals at a lower comp scale but offering a much better quality of life, because they’re usually not working evenings and weekends,” he said. “At boutique restructuring advisory consulting practices you don’t work the insane hours a typical investment banker does, whereas at Jefferies or Piper, the comp is the same as any other banking group, but so is the lifestyle.”
McCool confirmed that restructuring professionals typically make the equivalent amount as M&A professionals and the base salary really just depends on the size of the bank. He says that lboutiques and bulge brackets are around the $200k-$250k range on the base for VPs, directors are in the range of $250k-$300k, while EDs and MDs are in the $300k-$400k range.
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