Beyond the M&A boom

With the UK's M&A boom showing no sign of slackening off, it may seem churlish to be asking what will happen to M&A bankers if, or more likely when, the bubble bursts.

But with financial storm clouds brewing - not least America's shaky housing market - it's worth giving a thought to what M&A talent will do when the boom turns sour.

One answer may be to offer restructuring advice. Banks like Goldman Sachs have been building in this area since July. Roger Ehrenberg, former chief executive of US-based Deutsche Bank Advisors, is currently featured on a blog saying that while an economic downturn can, and normally does, dampen M&A activity it can also "turbocharge" restructuring activity.

Another may be hedge funds. A recent report from Reuters suggested event driven funds are likely to do well next year (albeit on the back of a continued M&A boom). Recruiters say distressed debt-focused funds will also hire corporate financiers. Indeed, they are in the market for them already says Peter Elliott, a director at hedge fund recruiter Emerson Chase City.

"We are recruiting for a number of hedge funds with event driven strategies at the moment. We are finding the flood gates have opened," he says.

"There is a willingness to take people with an M&A background. A lot of it boils down to candidate shortage," he adds.

But, cautions David Durham, managing director of Durham Consulting, a sharp downturn in M&A activity may not automatically mean a pick-up in restructuring roles.

"Hedge funds are only in play if something is happening. If there is no M&A activity, they are not going to be analysing deals," he warns.

The last time the M&A bubble burst in 2001, Durham points out that rather than moving into restructuring roles or hedge funds, redundant senior corporate financiers simply set up their own boutiques.