The structured credit market has probably offered more opportunities for jobseekers over the past 12 months than any other sector in investment banking.
The Bond Market Association last month said the collateralised debt obligation market, one of the fastest growing areas in securitisation, had increased from global issuance of $25bn (€19.5bn) in the first quarter of 2004 to more than $71bn in the same period this year. That is only one part of a market which includes collateralised loan obligations and asset and mortgage-backed securities issuance.
Only the leveraged loan market in the credit sector can boast a similar rate of growth. Like structured credit, it has seen a rush of recruitment this year. However, the greater maturity of the European loans market means it boasts a deeper well of experienced bankers.
By contrast, the securitisation market has seen such rapid growth that investment banks, rating agencies and fund managers have found it difficult to keep up in terms of market advances and hiring and retaining staff.
Recruitment has been widespread as institutions have tried to establish or increase their securitisation teams. Experienced structured credit bankers are at a premium.
However, analysts point to the risks in a rapidly expanding market. They said some participants could be tempted to cut corners to keep up. Coupled with a lack of understanding of the market, it could mean safeguards were not introduced and investors would leave the market as quickly as they had gone into it, making the bubble burst.
But such risks are usually contained because they come under the eye of regulators and senior
staff. The implications of a lack of talent were illustrated last week when BNP Paribas hired Christos Danias from Credit Suisse as head of European CDOs. The French bank lost three CDO bankers to Citigroup last month.
The Citigroup hires were a response to the defection of bankers to Royal Bank of Scotland's structured finance team and a result of the US bank's decision to develop its business in Europe.
Citigroup last month recruited Deutsche Bank's Michael Raynes to head its global structured credit business.
The chain reaction recruitment pattern is testament to the market's size and the dearth of experienced bankers.
One structured credit syndicate banker said: "It is an extremely well-bid market and, if you ask whether there are a limitless number of people with the necessary skills and experience, the answer is probably no.
"If you're talking about senior individuals with significant experience, the answer is certainly no," he added.
One headhunter specialising in the CDO market said: "It is a niche market and the number of experienced professionals is noticeably more limited than in most other areas of the credit markets. As growth continues, so banks will find it harder to hire people with the skills they require."
She said the number of bankers being recruited had increased this year compared with last, particularly of senior staff. Bank of America, Barclays Capital, Deutsche Bank, SG Corporate and Investment Banking and UBS are some of those that have been building up their structured credit teams.
The headhunter said: "You're still seeing new entrants into the market - Lloyds came in and hired people from Fortis and we have a couple of other clients looking to build teams from scratch, so the bid for people is going to be strong.
"By default, there have to be new people coming through with less experience than they might have had if had they been hired a year or two ago."
Rating agencies are more susceptible than other groups because they have experienced staff who are paid less than their investment banking peers.
Another headhunter said: "Over the past few years, the rating agencies have been subject to continual raids from investment banks looking for experienced structured finance bankers. Some of the guys who left the agencies a couple of years ago to join investment banks have seen their compensation grow exponentially."