ECM eclipsing DCM on the pay scale
After years in the doldrums, recruiters say equity capital markets bankers are once again flavour of the month. They may even be earning more than their debt capital markets colleagues.
"ECM bankers will be the big earners this year," predicts Shaun Springer, chief executive officer of search firm Napier Scott. "The ECM markets are very active and after several years of cuts in that area, people are in strong demand and short supply."
A rival recruiter confirms the trend: "For the past few years you could earn more in DCM than in ECM," he says. "The ECM market was depressed, but there is now a lot more demand. And because the sector was squeezed, people are coming at a premium."
The healthy state of play for ECM bankers is reflected in figures for initial public offerings (IPOs). In the first quarter of this year, companies listing on UK markets raised $3.6bn, up 300% on the same period of 2005. Debenhams, the department store, is among the companies thought to be seeking an IPO in the next few months.
Credit Suisse is among the banks bulking up in ECM. Last month Steve Purdom, a former senior equity syndicate banker in its European business, returned to London from New York. Financial News reported that senior sources at Credit Suisse said it had a larger pipeline of deals and was looking to increase the size of its European team.
Dresdner Kleinwort Wasserstein is also looking for a junior ECM originator.
David Carrier, a director at search firm Kinsey Allen Consulting, says demand is strongest for ECM originators with between four and eight years' deal transaction experience. But he cautions it's still early days: "Demand is starting to pick up and that will ultimately result in prices being driven up and guarantees being paid for junior ECM bankers. It's not happening yet."
Carrier says a junior VP in ECM can command a total package of around $500,000 (285,000). By comparison, research by recruitment company EM Finance suggests top junior VPs in DCM earn around 250,000.
