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Investment banks' junior ranks are being pilfered by a range of buy-side firms

Private equity firms, direct lending and distressed debt funds have been raiding the junior ranks of investment banks, despite banks' recent efforts to keep hold of analysts and associates.

Juniors at most investment banks now get their annual bonus payments along with everyone else in the first quarter – as opposed to being paid in the summer. Despite bonuses for analysts and associates holding up this year, the buy-side has found it easier to prise them away in the past couple of months.

“The grass is greener on the buy-side,” says Andrew Perry, managing partner of headhunters Paragon Search Partners. “The regulatory issues hitting banks, the pressure on pay, and ongoing cost-cutting has led many juniors to pursue a career on the buy-side. A lot of analysts also rarely see the weekend, so work-life balance is also a factor.”

The junior ranks of leveraged finance teams in investment banks have been “decimated” in recent weeks, suggest recruiters, and most firms are affected.

At Citi, leveraged finance analyst Axel Wikner joined Barings Direct Lending and Laura Berguig, an associate on the same team, has been hired by Permira Debt Partners.

Adriano di Sandro, an analyst in the leveraged finance and sponsors group at Credit Suisse, has just joined Albacore Capital, while fellow analyst Pietro Piglione has been hired by non-bank lender Park Square Capital.

Riccardo Ghezzi, a leveraged finance analyst at Morgan Stanley, has been hired by Blackstone Group’s credit division, GSO Capital Partners. Andrea Calabrò, an analyst in the TMT investment banking team at J.P. Morgan has just joined growth equity firm General Atlantic as an associate. Lorenzo Fusco, an analyst at Deutsche, just joined HarbourVest Partners, while Nicole Schoenauer, an associate in European leveraged finance, has also left.

“On the surface, it looks like analysts and associates have been looked after this year, but there’s a lot of variation, and some juniors felt under-paid,” adds Andrew Pringle, director at recruiters Circle Square. “We’ve been doing a lot of replacement hiring for banks whose juniors have moved to the buy-side.”

“The buy-side does most of its hiring for juniors in the first quarter of the year, which has traditionally meant they paid out bonuses due to banks' analysts in the summer,” adds another buy-side recruiter. “The change in bonus cycle has made it easier for these firms to hire banks’ analysts and associates.”

Recruiters suggest that Credit Suisse’s junior ranks have been particularly hard hit, while Deutsche Bank analysts and associates are also departing. Investment banks are also poaching from each other to fill the gaps left by the recent buy-side raid.

Samir Dada, a vice president in Deutsche's leveraged finance team, is set to join Bank of America Merrill Lynch, while Alexandre Falewee, an analyst on Nomura’s acquisition and leveraged finance team, has just been hired by J.P. Morgan. Andy Lei, who worked in leveraged finance at Natixis, has just joined Morgan Stanley.


Photo: Getty Images

AUTHORPaul Clarke
  • ta
    13 April 2017

    Why is this surprising? IBD (M&A / Levfin) is no longer very lucrative. Espi Levfin - the amount of regulatory BS that is sprung on you every couple of months is ludicrous.

    Not just that, but the number of pointless pitchbooks that analysts are made to do is bound to drive anyone mad.

    I work in Levfin at a tier 1 BB firm and frankly can't wait to get out - despite receiving stellar reviews in my appraisals. While I do like my work, the amount of BS keeps increasing - pointless pitch books, late nights spent working on pages the VP or MD or Partner won't spend more than 5 secs referencing in a meeting.

    I'm sorry - but I just can't reconcile this with staying long term in this industry. I would any day take a PE or corp financing role at a strategic than continue with this in the long term.

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