Where will hiring hit in 2006? It all depends where you look, with Europe and the US taking different tacks.
Europe 2006: Utilities bankers, real estate, derivatives
In London, for example, Armstrong International is predicting strong demand in 2006 for quantitative researchers to work with credit derivative products. In Frankfurt, recruiters predict an ongoing requirement for equity derivative specialists as companies such as Royal Bank of Scotland make a rumoured push into the German market.
In France, Sophie Wigniolle, a consultant at search firm Eric Salmon & Partners, is forecasting a need for utilities bankers as the imminent €62bn ($73bn) part-privatisation of Electricité de France focuses attention on the sector.
Antoine Morgaut, head of financial services recruitment at Robert Walters in Paris, predicts resurgent demand for M&A and corporate bankers: "The increase in activity has so far been absorbed by existing staff, but next year additional hiring will be required." After four quiet years, he says French equities recruitment should come back for a similar reason.
In Italy meanwhile, Alberto Gavazzi at Russell Reynolds says the real estate sector is on the move: "Italian banks are short on specialized real estate finance staff. Several players need to strengthen their ability."
Sergio Zanetta, an associate partner at Italian recruiter Proper Transearch, says Italian private banking recruitment should remain strong, as will the infrastructure sector. Macquarie Bank, for example, opened up in Italy last year, and is expected to continue adding staff in 2006.
Wall Street 2006: Financial sponsors coverage, prop trading, equity derivatives
Once the festivities subside in January, Gary Goldstein, chief executive of New York-based search firm the Whitney Group, is predicting continued interest in senior M&A talent, particularly if it comes with financial institutions experience.
He says financial sponsor coverage professionals can also expect to be in demand, fuelled by the ongoing private equity boom, and that infrastructure investing and financing will be a growth area.
Richard G. Lipstein, a managing director at Boyden Executive Search in New York, is forecasting US corporate finance recruiters will focus on the technology and telecoms sectors: "Technology is becoming a more mature business and companies in the sector are going to have to out and make acquisitions," he says. He adds: "Banks will need to recruit staff to deal with that."
Michael Karp, co-founder and managing partner at international search firm Options Group, anticipates continued action in proprietary trading. "Banks like CSFB, Merrill Lynch, UBS and Morgan Stanley are looking to build their prop trading efforts," he says. "But it's going to be a challenge - good prop traders are hard to come by and hedge funds will be competing for talent."
He says other hot spots for next year are likely to be equity derivatives sales and trading, with banks such as BNP Paribas, Deutsche Bank, UBS and Wachovia looking to expand in this area.