Bank by bank hiring predictions for 2011
If you want a new front office job in investment banking in 2011, you will probably need to be patient.
There are rumours of enduring hiring freezes. If last year was all about biggish expansion plans, this year is going to be all about making do with what you've got and hiring replacements as necessary.
Bonus dissatisfaction and departures are therefore predictors of this year's recruitment needs, and there may be the occasional strategic push. Here's what we expect, bank by bank, in the months to come:
Bank of America Merrill Lynch
Level of bonus dissatisfaction: Moderate.
Strategic hiring focus This year's big focus at BAML is M&A. In January, Christian Meissner said he wanted to hire up to 30 MDs in EMEA in 2011. Nomura is expected to be his preferred hunting ground. M&A headhunters say there's also some demand for VP level hires. Separately, there's said to be interest in a small amount of hiring for emerging markets, credit and rates.
In the conference call accompanying its fourth quarter results, BAML indicated that headcount in its investment bank would be stable this year and that any recruitment would be about shifting talent internally and hiring out of business schools and universities.
BarCap
Level of bonus dissatisfaction: Moderate. Overall compensation is up, but bonus deferrals are said to kick in quite early at the junior end.
Strategic hiring focus Recruiters say there's very little recruitment happening at BarCap this year and there are even rumours of a hiring freeze. BarCap itself says its equities and investment banking buildout is now 90% complete in Europe. Instead of hiring, BarCap is expected to focus on getting costs under control in order to improve its return on equity; 600 redundancies are being made globally, with 200 of those coming in the UK. Later in the year, there may be some upgrading in equity derivatives.
BNP Paribas
Level of bonus dissatisfaction: Unknown. Bonuses only just announced.
Strategic hiring focus The focus this year at BNP is instead expected to be in building out the non-fixed income business. In February the bank announced a plan to increase its corporate banking and advisory income across Europe, suggesting it too will be after senior relationship bankers. At the start of 2011, one recruiter said BNP was in the market for junior M&A people, but that it now seems to be pulling back from this.
Last October, BNP announced plans to add 200 equities people over the next three years to its joint venture with Exane. It said100 will be in equity research, 50 will be in sales and trading and 50 will be moved across from its corporate finance unit. This is still thought to stand. However, last year's fixed income build is said to be fairly complete.
Citigroup
Level of bonus dissatisfaction: Low. Generous deferral scheme, with a high proportion of bonuses paid out in cash.
Strategic hiring focus This year's focus at Citi is going to be on rebuilding the investment banking franchise. The bank has said it wants to hire as many as 20 senior investment bankers in Europe in the first half and we understand it's looking for anything from 15-30 junior M&A bankers. Headhunters say it's also in the market for around five new equity researchers.
Credit Suisse
Level of bonus dissatisfaction: High. Lots of departures expected, with lots of replacement hires to follow.
Strategic hiring focus Credit Suisse's hiring in 2011 is likely to be mostly reactionary. Having imposed strict deferrals on its investment bankers, it's expected to lose large swathes of its people - subject to them being able to find somewhere else to go. In the meantime, Credit Suisse is also rumoured to be subject to a hiring freeze, with recruitment limited to one in one out, although there it may have some interest in expanding in commodities.
Deutsche Bank
Level of bonus dissatisfaction: Moderate. People said to be most unhappy with payouts below director level.
Strategic hiring focus Headhunters say Deutsche is hiring for its capital markets business in Africa and the Middle East, and that it has a handful of junior M&A vacancies. There may also be a bit of hiring in equity derivatives under Dixit Joshi.
However, this year at Deutsche is likely to be mostly about cost cutting in non-revenue generating areas.
Evercore
Level of bonus dissatisfaction: Not known.
Strategic hiring focus Evercore is understood to be hiring partner-level people into M&A in London, and is building out its equities business.
Goldman Sachs
Level of bonus dissatisfaction: Low. Generous deferral scheme, with a high proportion of bonuses paid out in cash.
Strategic hiring focus Goldman's expected to continue to focus on building its asset management business in 2011. Headhunters say it's also in the market for upgrading DCM in Europe and for new fixed income salespeople after losing market share in 2010.
HSBC
Level of bonus dissatisfaction: Unknown. Bonuses only just announced, thought to be low, although this is nothing unusual.
Strategic hiring focus Equities. Samir Assaf joined as head of equities on January 1st and is thought to be building the business out - although there hasn't been much sign of this yet. Headhunters say HSBC is also hiring in private banking, asset management, emerging markets, and commodities.
Jefferies
Level of bonus dissatisfaction: Unknown.
Strategic hiring focus One of the big hirers of 2010, Jefferies is still building its equities and M&A business. So far this year, it's hired a European head of 'loding and gaming' investment banking, an MD of European volatility trading
It's also hired a senior rates banker in London.
JPMorgan
Level of bonus dissatisfaction: Low.
Strategic hiring focus According to JPMorgan's recent Investor Day presentation, hiring this year will be focused on corporate banking and prime brokerage. There's also likely to be a focus on risk and efficient capital allocation. At the same time, 3,000 operations roles are expected to be eliminated as the bank consolidates its trading systems.
Recruiters point out that JPMorgan needs to hire a new team of banking analysts after losing people to Credit Suisse last month.
Lloyds
Level of bonus dissatisfaction: Unknown. Expectations probably low.
Strategic hiring focus Lloyds is said to be closing its equities business and making redundancies in technology, but recruiters say it's also hiring in fixed income. It recently appointed Richard Hitchcox of Credit Suisse as head of flow rates sales and is said to be hiring for FX sales too.
Macquarie
Level of bonus dissatisfaction: Bonuses not announced yet.
Strategic hiring focus Macquarie is expected to announce a new European CEO in the next month, after its last one left after just a few weeks in the job last August. This could spur some hiring. Headhunters say Macquarie already wants to hire a few more people in M&A and for emerging markets desks, but that candidates are not always keen to join.
Morgan Stanley
Level of bonus dissatisfaction: High. Multiple exits possible, making replacement hiring necessary. "The average deferral for everyone at Morgan Stanley, even non-code staff at associate level, was around 60%," says one M&A headhunter. "They made a big mistake, a lot of people want to leave."
Strategic hiring focus Morgan Stanley has a new European head in the form of Colm Kelleher. This could lead to some hiring, particularly in rates and FX, where Morgan Stanley has indicated it has gaps.
Overall, however, expansion is likely to be moderate. In January, James Gorman said they weren't, "aggressively hiring right now" and that the focus is on seeing results from last year's recruits. Most recruitment at Morgan Stanley this year is mostly likely to be the result of replacement hires as people leave after bonuses are paid.
RBS
Level of bonus dissatisfaction: Fairly high. Producers looked after, lots of zeroes elsewhere, departures expected.
Strategic hiring focus RBS may need to make some replacement hires, particularly in areas like corporate finance, where it's been losing juniors. Right now, it's rumoured to have a hiring freeze.
SocGen
Level of bonus dissatisfaction: Possibly high. High level of deferral rumoured.
Strategic hiring focus SocGen is said to have completed last year's M&A build, but headhunters say it's still hiring in ECM and fixed income. However, budgets are said to be tight and it's allegedly having problems attracting people.
UBS
Level of bonus dissatisfaction: Fairly high. Top people were looked after, but lots of zeros elsewhere. Some replacement hiring will be necessary.
Strategic hiring focus UBS has issued an internal memo saying that within in its investment bank the focus is no longer hiring but cost control. It's also combined its FICC and equities businesses in such a manner as to leave the future of Neal Shear, who joined last year as head of the securities and oversaw the FICC buildout, uncertain.
Headhunters say there's really not very much recruitment going on at UBS all, although there are still hopes of hiring in equity derivatives. On the whole, any front office recruitment at UBS in 2011 is most likely to be driven by the need to replace people who leave.
