A resurgence of mergers and acquisitions among banks is fueling an increased demand for talent within Financial Institutions Groups.
Among the positions investment firms are most eager to fill are M&A specialists and relationship managers, say Wall Street recruiters. Competition for the industry's top dealmakers has also created a revolving-door environment in which investment bankers are leaving long-term posts for positions at competitors. For example, Gilles Graham, an 11-year veteran of Morgan Stanley, left the bank's financial institutions group to join Lehman Brothers next month.
"FIG hiring goes in cycles on Wall Street. But the mergers and acquisitions marketplace is very hot right now in terms of both commercial and foreign banks acquiring community and middle-market banks," explains Kenneth M. Rich, a recruitment consultant for Edward W. Kelley & Partners in New York.
Riding the Wave
Financial institutions generated $24 billion in revenues for investment banks last year and 31 percent of market share for all industry sectors, says data provider Dealogic. M&A activity drove a substantial amount of the business: There were 283 M&A deals among banks and thrifts in 2006, up from 275 in 2005, according to SNL Financial, a financial information provider. Among the most notable deals: Wachovia's acquisition of Golden West Financial for $25.5 billion and the $16.5 billion merger between Bank of New York and Mellon Financial.
FIGs, and particularly their M&A specialists, are the conduit for facilitating such deals. Desirable candidates have strong technical, analytical and financial skills, says Rich. While FIGs in larger banks often include M&A specialists, the same people in smaller firms may work in a pool that covers transactions among financial institutions and other industries. FIGs also handle insurance industry deals.
Relationship managers - the professionals who cross sell the bank's products to financial institution clients - can be keys to the strength of the investment bank as a whole, not only its FIG. "You need to be able to do your own thorough analysis, in systems and modeling, and be quite communicative in terms of what happens on the trading floor," explains Mitch Feldman, President of A.E. Feldman, a New York-based executive recruiting and management consulting firm. "If you're an analyst, you must be a cross-seller between structurers, traders." Understanding how to read legal documentation is also a desirable skill, he adds.
FIG professionals share the same titles and pay scale as other investment bank employees. At top tier banks, median compensation for a first-year associate was about $235,000 in 2006, according to a New York City compensation consultant. For a third-year vice president, the media compensation was $1.1 million. A first-year analyst earned $125,000.