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Is there really a rush of hiring related to prime broking?

Once again, prime broking is looking good. Several places have declared an interest in expanding their businesses. Pb professionals have good reason to think they might be able to find new jobs paying considerably more than their existing ones.

Or not.

According to one London headhunter specialising in prime broking, there isn't actually a load of recruitment going on. There were a lot more jobs in 2010.

"The first three months of this year have been a lot quieter than last year in prime brokerage," says Andrew Morland of search firm Pelham International. "There are pockets of activity, but recruitment is mostly driven by dissatisfaction with bonuses rather than big expansion plans."

How can this be? After all, JPMorgan and Bank of America have both said they want to expand in prime broking. Bank of America has hired the global head of prime broking from UBS, plus two of his team (one of whom was head of pb for Europe) for what was probably a large amount of money. Various people are also said to be on the verge of resigning from pb at Credit Suisse, and both BNP Paribas and HSBC have been expanding their prime broking businesses in the recent past.

Dousing the excitement

Much of the hiring, however, seems likely to take place outside London. Headhunters say BAML is close to being fully staffed here. HSBC has reputedly already hired lots of sales people and now needs to work on its product. And JPMorgan inherited Bear Stearns' pb business, for which it hired a new head of European sales last year, but recruiters say hiring there has been 'less than anticipated.'

As with other business areas, pb hiring within banks this year is therefore likely to be driven by disappointment instead of growth. The exits from Credit Suisse and UBS are allegedly related to bonus peevishness, for example.

And former head of prime broking turned hedge fund manager insists pb is - and will remain - a big growth area for big banks. "It's all about cross-selling," he says. "Once you've got the hedge fund clients through the door, you can hook them up as clients for the bank as a whole."

AUTHORSarah Butcher Global Editor
  • Do
    Doesn't matter
    10 March 2011

    It's actually a lot more than what GSPBER says, and at many firms under that umbrella you'll find some bona fide trading operations

  • GS
    GS pber
    10 March 2011

    it's basically providing back and middle office services to hedge funds... can be dull, pay is not m&a or trading levels, but its still an investment banking job, so total comp is good compared with other finanical services... and it would hurt to add "please" next time around

  • gl
    10 March 2011

    Could someone remind me what prime broking is again?

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