Securitisation: a tale of two halves
Recruiters say the securitisation market has divided into two distinct halves: one of them booming, in which banks are hiring and pay is up; the other languishing, in which teams are full and bonuses all but stagnant.
You don't have to look far to spot the part that's booming. According to Moody's, the rating agency, commercial mortgaged backed securitisation (CMBS) issuance is set to reach nearly €50bn in 2006, higher even than last year's all-time high of €43.1bn.
Lee Thacker, a consultant at search firm Highland Partners, says aggressive growth in the CMBS market is set to prompt continued hiring. Credit Suisse, Deutsche Bank, Bear Stearns, Nomura, Barclays Capital and Citigroup have all built up in European CMBS in the past 12-18 months, says Thacker, and he forecasts that Deutsche Bank, JPMorgan and Morgan Stanley will be among the recruiters in the area in 2006.
Encouraging CMBS specialists to move on may be another matter, however. Thacker says most have seen 2005 bonuses rise between 10% and 20% on 2004, with anyone in a principal finance or non-performing loan-related position receiving the most.
By comparison, traditional asset backed securitisation (ABS) specialists are in the doldrums. Thacker says bonuses in ABS were generally flat, and hiring is almost non-existent. "Most ABS teams are stable: flow securitisation has become a low margin product. There's no incentive for growth."
Signs that all is not well in the world of ABS include news in EuroWeek last week that Lee Rochford, head of the European asset finance group at Credit Suisse, was leaving. Strangely enough, it coincided with the announcement of the bank's bonuses.
