If you're in the northern hemisphere, today is the first day of autumn: 2015 is in coming into view. So, will next year bring a resurgence in front office investment banking recruitment? Yes, but not across the board. We asked London-based headhunters for their early assessments of next year's hiring hotspots, and this was their verdict:
1. Big banking jobs of 2015: M&A and IBD juniors
2014 has been big for recruiters who place junior M&A bankers and corporate financiers into investment banking divisions (IBD). Recruiters predict that's set to continue beyond January.
"It's a supply issue," says Logan Naidu, chief executive of recruitment firm Dartmouth Partners. "Banks didn't hire enough juniors during the downturn and now there aren't enough to go around."
The shortage of juniors is already prompting banks to recruit newly qualified ACAs from accounting firms, and even lawyers. Recruiters claim that Rothschild recently hired 15 ACAs, and allegedly made them 24-hour exploding offers, something unconfirmed by the bank. Macquarie, Citi, Goldman Sachs and HSBC are already in the market for M&A juniors, or so say recruiters.
"It's not entry-level people, it's analysts with two and three years' experience they're after," says Andy Pringle, director of recruitment firm Circle Square. M&A hiring could creep up the food chain next year, Pringle predicts. "Banks will usually hire managing directors (MDs), and then they'll hire analysts to support those MDs. Then they'll hire associates, vice presidents (VPs) and directors," he says.
Another M&A headhunter suggests that UBS might try hiring some analysts and associates next year. "We've seen a lot of top end hires at UBS this year, but nothing much at the junior end. You'd expect them to hire juniors next year," he adds. "But maybe they're trying to do more with less."
2. Big banking jobs of 2015: Equity derivatives trading and structuring
Equity derivatives headhunters are also ebullient about next year. Revenues in structured equity products have been up in 2014, says one. "Flow has been poor, but there's money to be invested in good structurers and institutional salespeople," he says, speaking off the record.
The recent (and as yet unreported) departure of Daniel Petherick and his team from Citigroup's equity derivatives business is held up as an example of next year's coming moves. Petherick joined Citi in 2009 and was head of EMEA equity derivative flow sales. The FCA Register shows that he quit at the end of August. Recruiters claim he's off to SocGen with several others.
"Equity derivatives trading is something that's being looked at a lot," says another derivatives headhunter. "Flow trading has become more electronic, but we're getting a calls for index traders and equity derivatives traders in general. It's not across the market, but bank by bank." In sales, Citi may need to hire a Petherick replacement.
3. Big banking jobs of 2015: Refinancing and debt advisory specialists
Refinancing jobs hold promise for next year too. Evercore has just formed a London-based dedicated debt advisory business. Altium has set up a new debt advisory team and hired two people from DC Partners. Commercial loan servicing company Hatfield Philips International set up a debt advisory business in July and hired two people from Lloyds and Morgan Stanley to staff it.
Next year will bring more of the same, predicts Pringle. "There's a lot of refinancing work out there," he says. "It's a bit more boring and low risk than it used to be - loan to value ratios are lower. But it's coming back."
4. Big banking jobs of 2015: Securitisation professionals
And then there's securitization. Even before Mario Draghi blew fresh life into the securitisation market earlier this month, hiring was making a comeback.
Recruiters point to Derek Rich, who recently joined Credit Suisse as head of commercial real estate loan origination, an indication that the Swiss bank is planning to ramp up its commercial mortgage backed securities portfolio again after years of winding it down. Rich is a CMBS heavyweight, having previously worked for Deutsche and UBS.
"A lot of securitisation teams were shut down or dramatically scaled back after the financial crisis," says Ted Tracey at Cobalt Recruitment. "But the market is quite buoyant as investor appetite for ABS has returned and securitisation professionals who remained in the market post crisis, across buy/sell-side and loan servicing platforms are quietly confident about next year."
5. Big banking jobs of 2015: Electronic trading
It's become a truism to say that electronic trading will be hot. But recruiters say it really will be hot. Again.
Electronic trading will mostly be hot with regards to fixed income currencies and commodities, however. With regards to equities, it will be warm(ish).
"Equities hiring is relatively stagnant in terms of electronic markets," says Marcus Newman at search firm Sheffield Haworth. "Hiring there will mostly be driven by regulatory change. On the fixed income side banks are still feeling their way - they still want quant researchers, market structurers and tech staff who can build the new matching systems and aggregators they'll need for the future."
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