Over 70% of financial firms will increase headcount next year, as investment banking deals surge
M&A bankers have been left waiting for the supposedly large pipeline to come into fruition throughout 2013, but next year could be when the industry really starts to turn around. More firms are hiring and expanding in anticipation of a 17% uptick in deals that would push volumes back up to 2008 highs. London, however, is not the place to be.
The annual Outlook for Investment Banking Services, published by Thomson Reuters and Freeman Consulting, has just been released and has unveiled a surge in optimism. In contrast to last year, when investment banks were rolling out redundancies and unveiling huge restructuring plans, the outlook for 2014 is surprisingly bright.
As well as increased M&A volumes, equity volumes are expected to rise by 16% – largely in the U.S. where there’s pent up demand for capital to fuel expansion – and debt market activity is expected to rise by 17%, which would be an all-time record for bond issuance.
Not surprisingly, this is translating across to hiring. Last year, just 11% of financial services firms said that they expected an increase in recruitment activity – a figure that swelled to 71% in 2014, the largest proportion of any industry.
London investment bankers may wish to hold the celebrations, however. In a turnaround from last year, Western Europe is viewed as one of the least attractive regions for M&A activity in 2014, along with Eastern Europe and the Middle East and Africa.