It’s a cold wind that’s blowing through M&A and capital markets jobs, but don’t be deceived into thinking it’s all bad. There are some areas where it’s actually still quite temperate.
From my – highly subjective – perspective, these are as follows:
New international entrants
The M&A market looks like it might pick up by the middle of next year. We expect hiring from large U.S., European, and Indian banks. They will be coming to the market in order to exploit the M&A talent which is available on the market and to build a franchise at low cost before the expected upsurge eventually arrives. A word of warning: if you’re an MD who joins one of these houses on a large package, be aware that you will quickly lose favor if the expected business doesn’t come through.
Boutiques are seizing M&A market share and are interesting places to be now. Look at larger boutiques and the niche sector-focused players – Moelis, Jefferies, Arma or Stamford. Get into the right business. Don’t worry about basic salary, but do make sure they’re doing deals and not just pitching.
Tech Corp finance shops
Specifically, I suggest you try for roles in technology corporate finance houses. With few exceptions, all the corporate finance boutiques we deal with are recruiting in the tech space.
Whether debt restructuring or operational restructuring, this has been a massive expansion area over the last 5 years and looks likely to remain one in future. Sector-specific teams in the real estate sector (CMBS ideally) are going to keep getting bigger. So too are Europe-focused restructuring teams (no surprise there.)
Emerging markets is also look promising. Standard Chartered has just made a major commitment to Africa, for example. However, be sure that the company you join has the commitment to go the full distance. You don’t want to commit to an emerging markets operation only to find that it’s closed when business slows – as an ING has done recently.
If these are the warmer business areas, which ones should you avoid on pain of hypothermia?
Equity Capital Markets (ECM)
There have been rumors in the market that it could be two years before ECM fees make a comeback. If you work in ECM, or used to be working in ECM, you may want to think of alternative careers. In my experience it should be possible for you to reapply your skills in private placement or investor relations.
Anywhere paying a large base salary
It may tempting to go for the big base salary, but when it comes to the chop you will be the first to go. Don’t be tempted by the big base – go for the role that offers the most exposure to deals. You need to be in play when the market takes off, not trying to re-enter with two years on the bench.
Andrew Pringle is director of Circle Square, a corporate finance and private equity recruitment firm.