Unfortunately, significant M&A hiring may be a while away
While traders in investment banks may have reason to feel increasingly paranoid about their job security, those in M&A should feel more secure about their employment prospects going forward.
According to analysis by Financial News things are beginning to look up for European M&A - more than $162bn of deals have been announced in the last four weeks alone (the liveliest period since October 2008) and signs point to a sustained recovery in the sector.
Ian Hart, managing director in UK investment banking at Morgan Stanley, told the newspaper: "In recent months we've seen more activity than we have for a long time."
Recruitment in the M&A divisions of the large banks has been relatively muted throughout the first half of 2010, due to comparatively anemic deal activity until after Q1, which suggests that institutions potentially have a need to bolster their teams if the deals continue to flow.
"Most firms will already be looking at their staffing levels, but there's a general degree of conservatism because of concerns over how sustainable this spike in deal activity is," says Nick Jeal, partner in the transaction services division of Deloitte.
As we've alluded to earlier, M&A should be an area banks will look to build if this pipeline of announcements manifests itself as actual deals, but it's questionable just how soon this hiring will take place.
Thomas Lindberg, who heads the corporate finance practice at headhunters Execuzen, says: "We need to see some more stability in the equity markets and some follow through on some of the big deals that have been announced before banks will commit to hiring in major way in M&A."
Sadly, this looks more like being 2011 than the second half of this year. As the recent stumbling blocks around BHP Billiton's $39bn hostile takeover attempt of PotashCorp shows, sealing the deal can be a drawn out process.
"Despite the increased levels of confidence in the sector, most transactions are taking longer to get completed than has historically been the case," says Jeal.
