Trading up for talent, banking boutiques are feasting on Wall Street's castaways.
While many laid-off bankers seek a new home within the vibrant hedge fund sector, smaller sell-side firms also are dipping into the pool of top candidates unleashed by the industry downturn. A recent Reuters story points to Thomas Weisel Partners, Wedbush Morgan Securities, and Evercore Partners as boutique firms engaging in opportunistic hiring lately.
San Francisco-based investment bank Thomas Weisel Partners has hired former employees of UBS, Bank of America, Merrill and Bear Stearns in recent months. Its president told Reuters that Thomas Weisel has been "a direct beneficiary of the dislocations" in the larger banks.
However, Weisel itself has announced a mass layoff this year. In April, when reporting a net loss for the first quarter, the firm said it would cut its workforce by 13 percent, but would "continue to selectively upgrade its talent pool within revenue generation areas."
Los Angeles-based Wedbush Morgan also says it's taking advantage of the flood of available talent. It has grown from 600 employees to 820 in the last two years.
Many boutique firms have sidestepped the mortgage-related and other losses that caused their bulge-bracket counterparts to lay off roughly 100,000 staffers this year. These upstart banks "are betting the cuts will continue well into next year, making the pool of unemployed talent both deeper and cheaper," Reuters says. For one thing, year-end bonuses are expected to shrink once again, even for well-performing staff and groups.
Roger Altman, the chief executive of merger advisory boutique Evercore Partners, summed it up this way in a confernce call last month: "This particular market condition affords rare recruiting opportunities, and we are able to find people and make the types of economic agreements with them that one doesn't normally see."
U.S. financial firms announced 100,775 job cuts in the first seven months of 2008, according to Challenger, Gray & Christmas, a global outplacement firm. Financial services candidates counseled by the firm are averaging four to five months to find new jobs, longer than the usual three months.