Boutiques losing staff to bigger M&A houses

As big investment banks hoover up corporate financiers, smaller firms are struggling to retain their staff.

"We've lost three juniors in the last three months alone," says an analyst at one UK corporate finance boutique. "It's becoming almost impossible to hold onto them."

The managing director of a boutique-focused search firm says investment banks' rapacious demand for corporate finance talent is taking its toll on small and mid cap-focused corporate finance boutiques, many of which maintained more consistent staffing levels than the larger banks during the downturn.

"Corporate finance activity in the mid-cap market held up better than for large cap firms between 2001 and 2003," she says. "As a result, there are people sitting in boutiques who have had a lot more transacting experience than people in investment banks."

As the M&A market takes off, transaction experience is making boutique staff a hot commodity. Dresdner Kleinwort Wasserstein, for example, is understood to have hired Alan Bertie, a managing director at Bridgewell's corporate advisory team.

Bridgewell confirmed Bertie's departure but Dresdner was unable immediately to confirm the move.

The financial incentives to move from a boutique firm to a large investment bank are considerable. Recruiters say second year analysts in boutiques can expect to earn a base salary of 40,000 to 45,000, plus an average bonus of around 15%. By comparison, a recent survey by recruitment firm EM Finance, suggested second year analysts in investment banks are now earning similar base salaries plus bonuses of 68% to 100%.