ECM pros work harder for their money

European IPO volumes have almost hit their peak of 2000. But recruiters say banks still employ far fewer equity capital markets staff than they did in the bad old days.

"Despite the significant pick-up in activity, there hasn't been a massive increase in the size of equity capital markets teams in London this year," says David Carrier, a consultant at search firm Kinsey Allen. "Teams are now 50% the size they were in 2001."

Dealogic data suggests the value of European IPO activity has risen over 50% year on year to date. At US$72.6bn (32.3bn), it is now 96% the value it was at this time in 2000.

However, Carrier says recruitment in 2006 has been "very targeted" and that banks are unlikely to hire significant quantities of ECM expertise next year either. "If they've been able to cope so far, they'll see no need to add staff in 2007."

John Axworthy, head of the investment banking division at search firm Akamai Financial Markets, confirms ECM teams are lean compared to their 2000 peak. "Banks got rid of all the mid-level engine room people," he says. "And they are still finding it hard to replace them."

Lehman, Credit Suisse and Nomura have been among the banks adding to their ECM teams this year. Nomura added ex-Dresdner Kleinwort banker John St. John as a capital markets advisor in September, for example.

Although there is unlikely to be much significant ECM hiring in 2007, recruiters say HSBC, Citigroup, Lehman Brothers and Merrill Lynch are among those likely to hire next year. The focus is likely to remain corporate equity derivatives and emerging markets.