Technology revival spurs demand for corporate financiers

There is light at the end of the tunnel for corporate financiers who specialise in technology. Their sector is moving back into fashion and companies are in hiring mode.

The head of technology mergers and acquisitions (M&A) at one European bank said the outlook for technology bankers has improved dramatically over the past six months: "Things are looking up big time. Technology initial public offerings and M&A volumes are both rising."

He said new staff are particularly needed to cater for the rise underway in new issuance: "Equity pitches are very labour intensive. M&A is also getting busier, but it is less labour intensive and fewer additional staff are required.'

In a sign of the improving climate, Credit Suisse First Boston completed a 55m flotation of Ark Therapeutics in February, in the largest European biotech IPO for three years.

Meanwhile Deutsche Bank poached 10 technology bankers from CSFB for its US technology team. The London-based corporate finance boutiques Amethyst Corporate Finance and Cobalt Ventures both recruited technology specialists in March.

HSBC appointed a CSFB technology specialist, John Jacobs, as head of technology investment banking, a move which headhunters expect to result in additional team hires.

Headhunters said Morgan Stanley, Lehman Brothers, and Deutsche Bank are recruiting technology specialists in Europe and the US.

The return to hiring mode comes after several difficult years for technology bankers. Jonathon Robin at Kinsey Allen Consulting, a recruitment firm, said technology teams were cut to the bone when technology stocks crashed in 2001:

'Teams of 30 people have been reduced to three. Over the coming months, institutions will want to ensure they have the right people in place, so they will not be caught out if the market comes back.'

Paddy MccGwire, managing director of Cobalt Ventures, which specialises in technology M&A, said activity picked up at the end of last year: 'The technology market definitely improved in October and November. There is a now lot of activity going on in the mid-market. Subscale venture capital backed companies are either consolidating, or being bought out by larger competitors.'

MccGwire said Cobalt has hired another technology banker, to join in Apri, and may hire a senior vice president with a technology background.

Nevertheless, search firms said technology teams were unlikely to expand to the size reached during the boom three or four years ago. Tim Sheffield, managing director of Sheffield Haworth, a search firm, said many investment banking technology teams have been integrated with media and telecoms teams and are likely to remain small:

'Banks are not scrabbling around looking for large numbers of tech specialists.'

James Hickman, a consultant at th search firm Russell Reynolds, said: 'Tech has definitely come out of the deep freeze, though it is not as hot as FIG, power and telecoms.'