Frankfurt and Paris have long been happy hunting grounds for investment banks in the City of London to find talent, but there are certain rules to follow. Usually, most recruits are fresh graduates looking to kick-start their career in London. If not, they’ll most likely have experience in a large bulge bracket bank locally, say Goldman Sachs, and then move into a smaller firm, say SocGen or Unicredit, in the City.
Now, however, such is the demand for analysts and associates in both M&A and equity capital markets (ECM), that these rules are going out of the window. Top-tier investment banks are giving out mandates to headhunters in European financial centres to find them junior bankers for roles in the City. What’s more, it’s possible to move from a smaller bank, say Commerzbank in Frankfurt, to the likes of Morgan Stanley in London.
“The skills shortage among junior investment bankers is pan-European,” says Dirk Albütz of headhunters Fibance in Frankfurt, who is working on a search for a US bank based in London. “The City has long been a magnet for associate bankers looking to fast-track their career, and they would have previously applied directly, but now talent is scarce.”
Investment banks have been hiking up pay for junior bankers, making attempts to reduce working hours and hiring significantly more people for their graduate programmes – Bank of America Merrill Lynch has increased its intake of interns by 40% this year, for example.
However, this year has seen a significant uptick in activity across ECM and M&A – globally ECM volume has reached a record $693.3bn in the first nine months of 2014 while M&A is up 31% on 2013 and has surpassed levels last seen in 2008. Investment banks are, therefore, scrambling to find trained juniors to handle the workload.
“We’re looking in Continental Europe for junior investment bankers,” adds Ross Stokes, an M&A and private equity headhunter at Circle Square in London. The search includes France, Germany and now even Spain, he says. “Candidates need to have worked on significantly-sized deals in their home countries, however.”
Philipp Seuss, who was working in equity capital markets at Unicredit in Frankfurt, has just moved across to Morgan Stanley, as has Maïté Möller, who has transferred across from its German office. Stokes says that bulge bracket banks are considering candidates from Jefferies and Commerzbank in Germany and Switzerland.
The current talent shortage has left many European headhunters being asked to fish from a relatively small pond, unable to accept potentially lucrative mandates from investment banks in London.
“I had to reject two mandates, because I saw no chance to fill these roles. Candidates at this level are so scarce that banks in London are hiring Frankfurt headhunters,” says Sabrina Tamm of headhunters Financial Markets.
A route into private equity straight out of university
The 5 most in-demand front office banking jobs of 2015
Do MBAs have what it takes to work in investment banking now?