Where investment banks are recruiting in the U.S. now

Now is a good time to work in M&A in the US. Several sectors have seen record activity in 2015 and investment banks have started to increase compensation – particularly at the junior ranks – and are bringing in more people to handle the workload.

But where do the opportunities really lie? These are the recruitment trends in the US M&A sector now.

Junior to mid-rank uptick

Investment banks have been struggling to hold on to junior bankers for the past 18 months, but more recently hiring had been focused in bringing in senior employees.

Now, as more banks pitch for new business, there’s a renewed hiring drive for those who can assemble pitchbooks, forecasting and financial modelling. This means analyst through to VP.

“Banks are mainly looking for are experienced analysts, junior associates, senior associates and VPs. Not so much for principal positions of managing directors,” says Doug Rickart, Minneapolis Division Director at Robert Half. “This is a reflection of the additional workload.”

Investment banks are particularly focused on analysts with healthcare or industrials experience, says Rickart. For VP roles, they’re looking for people who can develop into future leaders.

“These candidates need promise to evolve into a position that brings in business,” says Robert Pestreich, managing director of recruiters Harrison Stone & Associates.

At associate level, investment banks have had to start to get more flexible with the types of people they hire, says Simon Lewis, managing director, head of banking and financial services at Page Executive.

“Top banks are looking for associates with an MBA, but pre MBA they’ve been willing to consider candidates with a public accounting background as an alternative to the traditional two years of analyst experience,” adds Rickart.

“It's common for candidates with one year of investment banking experience to have two or three offers for associate positions on the table,” he says.

Compensation has been spiralling for junior investment bankers over the past 18 months anyway. Most banks increased total compensation by 20-25% in 2014, but recruiters suggest that the raise is closer to 10% this year as banks keep a closer eye on compensation costs.

However, investment banks still have to be wary of the gravitation of juniors to private equity. 36% of the analyst class of 2012 from both large and boutique investment banks have moved across to the buy-side and offers are being made ever-earlier – some analysts received offers this year just six months into their training for jobs that didn’t start for another 18 months.

Rickart says that there’s a particular focus on industrials and healthcare experience, while Lewis suggests that large-cap and middle market PE firms are also looking to hire for real estate and real estate investment trusts (Reits) in New York.

Healthcare is still hot

Across the board there’s increased demand for M&A bankers with exposure to healthcare, suggest recruiters. Meanwhile a lack of activity in the oil and energy sectors – including clean energy – has meant a slump in demand in these sectors.

“There is call for candidates with experience in healthcare, medical devices, med-tech and diagnostics, and also telecoms, media and technology (TMT), and financial institutions group (FIG),” says Lewis.

Banks are hiring MDs too

While it’s tempting to view the current market in the U.S. as being largely focused on the junior end, senior bankers are in also in demand.

“There is always appetite for people who can bring relationships, there is a hunger to bring in innovation” says Pestreich. “There is competition between banks, particularly at an experienced level.”

But there are other reasons for recruitment – senior bankers in the U.S are increasingly looking for alternatives. For a start, there’s a renewed appetite for working for boutique firms, which are less subject to regulation than larger firms.

“Some are pursuing a more ‘eat what you kill’ environment, and if they have the relationships and contacts to do so may pursue a move to a boutique firm,” says Pestreich. “People well positioned with relationships are often happier at the boutiques.”

Then there’s the fact that senior bankers with close relationships with clients are…going to work for the client. On recent example is Robert L. Eatroff, the head of M&A for Morgan Stanley Americas, who is set to join long-time client Comcast as head of corporate development in January.

“I’ve been surprised at the degree of activity in the non-financial services sector. Particularly the Fortune 50 companies, there are a number of firms hiring M&A professionals for corporate development to do in-house M&A activity,” says Pestreich.

“Bankers need to be good at networking and the business development aspects. If this is something a candidate doesn’t enjoy this then a corporate development team is a good substitute career path,” he explains. “There is a consistent demand for people in that area."