Bar Cap set to shake up ECM job market?

Barclays Capital plans to add an equities team to its ranks in the first half of 2010 and become a full-service investment bank in Australia. But entrenched competitors and a small local talent pool in ECM mean the firm will face a challenging employment market.

The British bank, which already has a DCM operation, has sought regulatory approval to offer equities trading. It is aiming to become a tier-two player and capture a market share of more than 5 per cent.

ECM teams at banks in Australia employ a select group of professionals, numbering no more than 100 senior people across the industry. "The talent pool is narrow, there's no doubt about that. Recruitment tends to be difficult because of the skill shortage," comments Warren Price, managing director of Select Personnel.

And banks prefer to poach each other's equities employees, rather than move staff internally from other departments. "In ECM, three or four people moving at any one time will create a musical-chairs effect across the banks," says Michael Notley, director, Taurus Financial Recruitment.

So how will Bar Cap fare in this miniature job market? It will certainly face strong competition for staff. Not only is talent in short supply, but demand from rival banks will probably increase next year on the back of more capital raisings.

Bar Cap will need to convince candidates that joining a comparative upstart is a sensible career move. In the short-term at least, it can't do this by offering them big domestic deal flows, but it can provide an untarnished brand name, and an expanding, integrated global equities network.

Headhunters say the most effective way for Bar Cap to take talent from rivals is to give them more money. "As a newcomer, Barclays will probably have to overpay. But I think it will back good people with serious money," says Price.

Which banks will provide the happiest hunting grounds? RBS is a prime candidate, according to one recruiter who asked not to be named. It's strong in Aussie ECM, but struggling globally, and Barclays has already poached two of its M&A team.

UBS, a local ECM leader, could be another source of staff, but only if some of its bankers are disgruntled with their Q1 bonuses, says the anonymous headhunter.

"If Barclays is hiring next year, the likelihood of some bank bonuses being under par will probably open the door for a few unhappy ECM bankers to move shop," adds Notley.

But if targeting the competition doesn't work so well, are there any other options? Not many. M&A professionals don't usually like taking ECM jobs because they see the sector as less prestigious than their own.

At VP-level or below, banks may interview overseas returnees for equities jobs, while at the senior end, they need originators who are already working in the local market.

"But they will consider senior relationship managers at commercial banks who have strong product and execution skills," says Price.