eFC Briefing: Barclays Targets Equities

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Building on its Lehman purchase, Barclays Capital is adding equities staff in Europe and Asia in a bid to rebuild a global cash equities business it withdrew from a decade ago. Top law firms slash associate bonuses. Top commodity traders are seen earning as much as 80 percent less than in 2007.

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Barclays Capital is aggressively hiring equities analysts and traders in Europe and Asia, aiming to build a global equities business around the U.S.-based infrastructure acquired from Lehman Brothers. "We've been looking for the right opportunity to enter the cash equity space in an efficient way for many years," Dixit Joshi, BarCap's London-based head of Europe and Asia equities, told the Financial Times. "The acquisition of Lehman's U.S. business has given it to us in one fell swoop." He said BarCap aims to be among the world's top five equities dealers within three years - a stature that the FT says would require a staff of hundreds in Europe alone.

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Top law firms have begun slashing bonuses for their associates, citing the troubled economy and financial conditions. On Monday, Davis Polk & Wardwell told its staff that 2008 associate bonuses would range from $17,500 to $32,500, AmLaw Daily reports. New York-based Davis Polk & Wardwell ranked 16th among the world's law firms in merger and acquisition advisory volume in 2007. The new figures, structured according to seniority, are exactly 50 percent below last year's "regular" bonus amounts. The firm also won't award additional, "special" bonuses that fattened associates' pay by a further $10,000 to $50,000 in 2007. Simpson Thacher & Bartlett informed its staff of identical reductions a week earlier.

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Pay for energy and precious-metals traders is in free-fall this year, mirroring the abrupt reversal in the prices of those and other commodities. Top commodity traders, who earned $5 million - $8 million total compensation in 2007, are expected to make just $1.0 million - $1.5 million this year, according to a Bloomberg News story citing estimates by London headhunter Kennedy Associates. While banks have stopped hiring and in some cases are laying off, a growing number of energy traders are leaving the finance sector for safer positions in utilities, power producers and independent niche trading firms. Pay remains higher in banks, but the gap is narrowing fast - to 7 percent from 18 percent a year ago, says UK recruiter Global Resource Solutions Group.

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Boston is no longer an oasis of calm amidst the maelstrom of the financial markets. Major employers like Fidelity Investments, MFS Investments and Bank of New York Mellon Corp. have all announced layoffs. Other companies, including MassMutual Financial Group and Putnam Investments, have announced management changes. Until recently, Boston-area recruiters indicated many workers from outside of New England were trying to return because employers there were seen as more stable. Given the market downturn, that perception has changed: Now even people with jobs are seeking out recruiters in droves.

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Foreign exchange and private wealth management professionals may enjoy a bit of a cushion for bonus payouts that are expected to plunge 40 percent or more for most other business segments within financial firms. That's one conclusion of an annual survey by Armstrong International, a London-based headhunter. The latest in a recent string of surveys focused on bonus expectations that are grabbing worldwide media attention, Armstrong polled more than 500 people working at 30 investment banks and financial institutions within the City of London. "About a quarter" of respondents told Armstrong they expect no bonus for 2008, according to New York Times DealBook.

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Wall Street is on its back, but scientists would be wise to take a contrarian approach and investigate careers in finance, says the American Association for the Advancement of Science. In a three-part feature on financial careers in its official publication, Science, the association likens preparing to enter the industry to the old investing maxim, "buy low, sell high." It also predicts demand for quantitative expertise and rigorous analysis will grow as financial activities are subjected to greater regulation and oversight.

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