Financial sponsors are flavour of the month

Financial sponsor specialists and leveraged financiers are currently the most hotly pursued people in front office financial services, according to the head of recruiting at one US bank.

"Financial sponsor origination and leveraged finance have been absolutely insane," he says. "Every good person in those areas has had about five calls from competitors, and people will only move for a 20% to 40% premium on last year's pay."

Lehman Brothers is understood to be hiring financial sponsor talent, as are several European banks and large US universal banks. Earlier this month, Commerzbank appointed five people to its London and Frankfurt leveraged finance team, while HSBC poached two senior bankers from Morgan Stanley as part of a push into leveraged finance in April.

James Bernie, a consultant on the corporate finance team at recruitment firm Badenoch & Clark, says financial sponsor bankers, who advise private equity firms on acquisitions and disposals, need a complex (and therefore rare) skillset: "It's not just pure M&A. After advising a private equity fund on a deal, you often need to liaise with the leveraged finance or ECM teams," he says.

Contrary to previous reports, Bernie says demand for bankers to join financial sponsor groups has shifted away from senior staff in favour of juniors, with interest focused particularly on analysts and associates.

Logan Naidu, a consultant at recruitment firm Cornell Partnership, agrees. "Most senior financial sponsor staff are in place - banks are now interested in juniors."

Financial sponsor groups are a popular place to work, says Naidu, mainly because they can be a springboard to working in private equity funds themselves. In March, for example, Colm O'Sullivan, a managing director in Deutsche's financial sponsor coverage group, left the bank to join private equity firm PAI.