Front-office roles in demand on Wall Street even as investment banks make cuts
The first-quarter results from the big banks ranged from mildly disappointing to bloodbath, and there wasn’t much excitement on the buy side, either. That has led some to continue cutting costs by either letting staff go or through hiring freezes. And it's front-office roles that are put on the chopping block.
That said, there are some relative bright spots amid the gloom as Wall Street firms look to hire talented professionals to fill revenue-producing, client-facing roles and make sure Q2 is more successful than Q1 was. Here are some of the areas where the hiring outlook is actually positive:
1. Restructuring and turnaround
There has been an increase in hiring advisory roles related to restructuring and turnaround activity, as well as special situations.
“There is potential for banks to advise companies that have already failed or may be failing, restructuring those companies or putting them into Chapter 11,” said Paul Webster, managing director and the head of Page Executive in North America. “In particular, there’s a rise in banks hiring advisory positions or restructuring positions focused on the energy space.”
There are also large household names – Fortune 500 companies – that have been placed on watch lists by banks and ratings agencies. Some are in financial difficulty and may go into Chapter 11 or some sort of restructuring situation.
“Advisory M&A bankers are already chasing these large corporates, so that if they do go into insolvency they win the mandate,” Webster said. “Some will be hiring in that area with the goal of improving the advisory or turnaround services that banks are trying to provide to corporates.”
2. Equity capital market sales/trading professionals
Banks have been cutting deep in fixed income, currencies and commodities (FICC), but the slump in equity capital markets (ECM) revenues and equity trading has meant that lay-offs have been implemented at banks like Barclays and Nomura. It's therefore surprising that equity remains a relatively strong area of recruitment on Wall Street.
“The majority of placements we’ve had this year have been in equity,” said Dylan Pany, principal consultant and the head of the trading team, Selby Jennings. “While the cash equity business has been cut, there is hiring going on in the derivatives business within equity, which has been pretty consistent for us over the past six months.”
He cited Citigroup, J.P. Morgan and Bank of America Merrill Lynch as examples of banks making a hiring push in equity trading.
And, as some U.S. tier-one and many of the top European players are cutting headcount, it presents an opportunity for tier-two and three players to add experienced talent.
“Some banks like Soc Gen, Credit Agricole, Natixis and Mizuho are recognizing the opportunity and bringing in good talent, while others are more cautious,” Pany said.
3. A range of hedge fund roles
Hedge funds are hiring analysts, fundraisers, investor relations professionals and portfolio managers Robin Judson, the president of recruitment firm Robin Judson Partners.
“Despite the volatility in the market and the concerns that we saw in the first quarter, many hedge funds felt that it was a good time to take advantage of the dislocation of personnel to make sure that they have the right people in place to react to the market,” Judson said.
4. Hybrid business manager focused on cross-selling
The largest global banks are considering the cost of lending and therefore the hurdle rate they need to achieve profitability and realizing that it is far harder to get decent rates of return on loans, so many are lending less money. Instead, they are focusing on cross-selling products and services to different clients across different regions.
“We’ve witnessed a two-year hiring phenomenon of a crossover between middle- and front-office roles,” Webster said. “They often look for serious corporate banking, lending, DCM or leveraged finance experience.”
While at some banks this role is handled or delegated by the head of the debt capital markets (DCM) or chief operating officer, some banks are hiring interdivisional business managers responsible for strategically reviewing and identifying the bank’s client coverage, services and products. They are tasked with pinpointing opportunities to drive revenue and work with various stakeholders across the bank to make it happen. The exact job title varies from bank to bank, and it is sometimes in either the DCM or corporate banking division.
“We have a mandate to hire a very senior person reporting into the heads of DCM at a large global bank, responsible for overall client coverage for all of the DCM bankers,” Webster said. “The role will be working with the heads of DCM to identify markets where the bank could cross-sell effectively.
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