London sucking up derivatives specialists

25 July 2007

2 minute read

London sucking up derivatives specialists

Quants and structurers are paid packets in London and peanuts in Continental Europe. The Continent's being left with the monkeys as a result.

"The people with the best education go where they can get the best money," says Thierry Bossant, a consultant covering France and Switzerland with Huxley Associates in Amsterdam. "In Paris, they can earn €40k plus a small bonus. In London, they can earn 50k plus a big bonus, so they all want to go to London. It's not so much that France has got a shortage of people - more a shortage of good people."

Mike Connolly, a California-based recruiter at MRC, is in the business of transferring quants from the likes of Frankfurt and Milan into London. He says there are pockets of quant talent on the Continent, but the best people want to be in the City - despite being aware that the higher pay packages are liable to be eroded by London living costs.

And once they've quit the Continent, Connolly says it's hard to entice them home: "If someone wants to return to Milan from London, they know it will be on a much lower salary."

A structurer with three years' experience in Milan can expect to earn between €50k and €70k plus a 30-40% bonus, according to Connolly. Come to London and pay is likely to be double at least.

With all the best people in London, there are questions over whether Continental European investors really know what they're doing. JPMorgan recently agreed to buy back €280m of structured bonds it underwrote in Greece after local pension funds claimed they were duped. And earlier this month Italian-based Italease was forced to pay €610m to mostly Italian counterparties after it sold them complex derivative products which (surprise, surprise) lost money when interest rates rose.

France, for one, is trying to do something about the exodus. The Financial Times says finance minister Christine Lagarde is calling for "trendy trading floors" in the French capital.

AUTHORAnonymous

Insider Comment

to
to the one who knows nothing
8 October 2007
I hope the naive one stays in London,and eventually becomes jobless whilst the ones that KNOW go to HK and Shnaghai... THAT is where the money is going!
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Mi
Mikelin
28 August 2007
Exodus to London? Wait for people to start their exodus ex London in search of better lives. Sun, Food, etc. England has its days counted.
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An
Anony Mous
3 August 2007
Hong Kong actually belongs to China. Mainland Chinas Law System is in large parts very modern - the enforcment is the difficulty. Hong Kong, Shanghai and even Beijing (Coporate Finance due to the HQ of all SOE)will grow in importance, but The Street and The City are simply another dimension. "Trendy trading floors", naice...
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Mo
Monkey
31 July 2007
..."Don't compare a third world country like china or Hong Kong to a democracy which have solid laws like the UK."
Funny how the locals don't understand/see how 3rd world country UK is. Yes, there are lots of foreigners here. We are here despite it is a 3rd world country in most aspects (e.g. infrastructure, manors, hygenic standards, service levels, equiality etc etc etc). No doubt one can make serious money here if one is smart, industrious and put in the effort, as in most other 3rd world countries. Actually, quite often because they are are 3rd world countries with weak infrastructure, a poorly educated local workforce, dysfumctional tax codes, antiquated management practices and low productivity in the local workforce. Not difficult to compete in an environment like that. That's why we overseas visitors are willing to spend/suffer a few years hear and then quickly take off and enjoy a 21st century lifestyle unlike the medieval offering in London.
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Sa
Sarah, Editor, eFinancialCaree
31 July 2007
Re Alan, we've been aware of the racist nature of his comments for sometime now, and have a general policy of not publishing them. I'm afraid this one slipped through. For the moment I think it suffices to let it stay there and for him to realise that his comments are unacceptable to everyone else. We will not be publishing them in future.
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