Berenberg sets its sights on aggressive U.S. recruitment after London build-out
Berenberg has rolled out a consistent message over the past two years - we are hiring. While larger investment banks have cut back headcount, the small German bank has been happy to raid the ranks of their research analysts and has been aggressively growing in the UK. Now, says David Mortlock, its head of investment and corporate banking, Berenberg is turning its attention to the U.S.
Berenberg has continued to hire for its investment bank even as larger firms have undergone some pretty structural changes. Are you still recruiting in 2017?
Yes. The plan in the U.S. this year is to add about 30 people, 15 research analysts and five people in equity sales, as well as a handful of salestraders and traders. But there’s scope for a lot more hiring going into 2018 and beyond. Ultimately, we want our U.S. business to become a similar size to our UK and European businesses over the next three to five years.
So, that means you’re going to hire about a hundred people over that period of time?
Definitely. The U.S. is the biggest equities market globally with a revenue opportunity of $8.5bn, so it’s a huge opportunity for us.
In recent years, I spent a lot of time in the U.S. and spoke to domestic investors and people who had tried – and in some cases failed – to build success businesses there. We’re pretty clear about what we want to do and how many people we need. One of the main mistakes companies make is running before they can walk and committing to too high costs too early. We want to follow how we built in Europe – by building up costs in line with revenues.
What about the UK? Still hiring there?
In the UK there are three areas where we are looking to add people. Firstly in the sales and trading and everything across execution. This is a process now for two years in advance of the MiFID II implementation. We intend to add five to ten people on the execution side this year. The second area is our UK corporate business, where we will probably add five to ten people too. We are doing more UK ECM transactions and we are serving more corporate broking clients. We have to make sure that we are well resourced for what looks like a good opportunity for us.
The third area is our graduate scheme. We are doing in about 25 to 30 graduates every October. Irrespective of market conditions we are growing our own talent from the bottom up. Aside from the graduate scheme, it’s very much a selective recruitment. Those aggressive years of building up headcount in the UK are over.
What are the chances of you moving staff from London to Frankfurt after Brexit?
No chance. As a German bank we have a banking licence in the EU and we have a lot of clearing and settlement activities over there.
And if other banks lose good people as a result of their Brexit-related moves then that’s an opportunity for us to hire. And if firms use Brexit as an excuse to cut costs, then again that’s a chance for us to pick up good people.
Which kind of career advice would you give to young people who would like to make their way in equities research, sales and trading under this difficult market conditions?
I have been in the industry now for over 18 years. Every few years it seems it is the end of investment banking and the end of active fund management. Generally, financial services is a very adaptable industry. My advice to young people is: Enjoy the job for what it is. It is still a fabulous career with an incredibly fast pace, it is very intellectual and very challenging and you get exposure to all sorts of interesting people and data. You really need a core enthusiasm. If you got that you can still have really rewarding careers.