Would you work as a freelance investment banker for up to $300 an hour?
Working in M&A does not allow for much time out of the office. The hours are demanding, the work stressful and aside from attempting to manage your career, there’s little time out for any side projects. At the same time, as more people in the industry have been laid off in the past eight years than at any point in living memory, getting back into a high-paid Wall Street job is not easy task.
One former private equity professional believes he has the answer – go freelance. Vikram Ashok, co-founder of Spare Hire, an ‘online marketplace’ for corporate finance professionals seeking freelance work to find projects and potential employers, says there’s a growing demand among Wall Street firms for temporary resources in the front office.
“There’s a growing proportion of very high calibre people who want to work on a temporary basis – we have a lot of senior people with M&A and private equity experience, who don’t want to work the demanding hours required of a full-time job,” he says. “A lot of people left the industry voluntarily and view this as a way of earning good money without too much commitment, while others are still looking to land a full-time job, but have struggled to do so.”
Ashok declined to reveal which banks are looking to utilise freelance investment bankers, other than to say that there’s a good mix of bulge bracket and boutique firms. Initially, he says, it was targeted at the junior end of the market, but increasingly banks have been parachuting in even managing director level candidates for temporary assignments.
“You could have some junior folks doing some financial modelling work, or a presentation or a more long-term project like a market study,” he says. “But we’re also seeing people brought in to actually lead the deal where the expertise isn’t easily available in-house.”
Ashok also says that a lot of former bankers have started their own businesses and are using their skills on a freelance basis to supplement their income without the commitment required of a full-time job.
While freelancing obviously offers flexibility and potentially easier hours, there are also two downsides – a lack of job security and, perhaps more worryingly for long-time investment bankers, no bonus.
However, pay for these freelance roles comes in at $50 an hour for the more standardised, junior work and to up to $300 an hour for the more senior positions. This is good money when compared to the hourly rate for working in M&A full-time. According to figures from salary benchmarking firm Emolument, analysts earn £16 ($27) an hour, rising to £30 ($51) for associates and up to £188 ($321) for managing directors.
The concept of Spare Hire is not without precedent – in 2011 former Credit Suisse associate Edmond Sassine started Analyst Pool, which was posited as a ‘virtual investment bank staffed by freelancers’, predominantly at the junior level.
Three years on, and Sassine has conceded defeat and shuttered the business. One problem was bankers’ egos – coming to terms with being out of a full-time job and working on a freelance basis was simply too much for most people, he says. Meanwhile, banks were reluctant to list their projects on the website.
The situation is different on Wall Street, insists Ashok: “The timing is right – there are a lot of people who have left the industry of their own accord and are only interested in part-time work while they pursue other interests. And, admittedly, there’s a bigger pool of people who are struggling to land a full-time job.”
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