Goldman Sachs needs a lot more MDs in Frankfurt
Will it be Frankfurt? Will it be Paris? As Theresa May prepares to push the button on Article 50, banks are preparing to push the button on Brexit contingency plans. Richard Gnodde, chief executive of Goldman Sachs International, said today that the bank will add "hundreds of people" in continental Europe as it moves into phase one of its planning. Goldman has licensed offices in both Frankfurt and Paris, Gnodde said, adding that the bank will be upgrading its European office space and taking on extra headcount soon.
So far, there's little sign that Goldman will be taking on this headcount in Paris. The firm's own jobs pages mostly contain jobs in London and Warsaw. There are no current openings in the French capital, but there are some revealing vacancies in the German financial centre.
Goldman is advertising for a compliance officer to work on regulatory affairs in Frankfurt. Several weeks ago it was also advertising for a recruiter to join its Frankfurt human capital team. The two roles suggest Goldman is looking to strengthen its BaFin-focused compliance team, and to boost Frankfurt headcount.
The German vacancies follow claims in Handelsblatt that Goldman Sachs is planning to move 3,000 jobs out of London, of which 1,000 will be shifted to Frankfurt in a new subsidiary known as 'Europe SE'. Back office and support jobs will reportedly be shifted to Warsaw while region-specific relationship managers will be shifted to France and Spain. Notably, Goldman is also currently advertising for a recruiter in its Warsaw hub and is preparing to shift a partner in its human capital management team to Poland.
As we reported previously, if Goldman's plans come to pass, its London office could shrink back to the size it was in 1999. This will unfortunately coincide with the opening of its fancy new office in Farringdon, which may need to be sublet. Goldman denied the Handelsblatt allegations when they came out in January.
Frankfurt headhunters say there's been little sign of a rush to hire the traders and senior managers Handelsblatt predicted Goldman will locate there. This might be because it's not happening, or that people are being shifted internally, or that the firm needs to get the compliance and infrastructure hires in place first. "You're going to see the middle and back office hires before the front office," says the head of one Frankfurt finance search firm.
Speaking off the record, the headhunter adds that Goldman's Frankfurt business is very bottom-heavy ever since the firm shifted management roles to London following the financial crisis. Although Goldman employs around 200 people in Frankfurt, he claims there are fewer than 10 front office MDs in the country. We count seven, including Jörg Kukies and Wolfgang Fink, co-heads of the German business, Thomas Veit in fixed income sales, Tilo Dresig, head of the financial institutions group, Michael Strafuss, co-head of FICC sales, Michael Schmitz in equities and Thomas Fischer in IBD.
Since 2009, the headhunter says Goldman's Frankfurt juniors have had to move to London if they want to progress: "You start your career in Frankfurt and then you have to move to London because Goldman - like most international banks - doesn't have a bunch of MDs here."
This could soon change, but for the moment Frankfurt recruiters say hiring across the market is heavier at the bottom end of the pyramid. Elena Barclay at the German office recruitment firm Dartmouth Partners, says demand is exceptionally strong for analysts, associates and VPs to work in the investment banking divisions of major firms or in private equity companies."Last year, hiring here was quite low and this year we're finding that all the bulge bracket and tier two and three players are active." She adds that it's not necessary to be German to work in Frankfurt: "The American banks are quite flexible about German native speakers - as long as you speak a bit of German and are willing to learn more you may be considered."
Barclay says first year IBD analysts in Frankfurt can generally expect a salary of €65k-70k (£56k-£61k) plus a 50% bonus. This is more than in London, where analyst pay typically tops out at around £72k. Frankfurt analysts are renowned for working hard though. In December last year, a Frankfurt analyst at Goldman Sachs collapsed at 2.30am whilst working on a live deal.