Wall Street banks do far less recruitment in the second half of the year, but headhunters say that hiring activity is much more robust than this point in 2016. It may be unusual for bankers to make a move late in the third quarter or in the fourth quarter, but firms are still making hires for front-office roles – even when they have to buy out or guarantee the new hire’s bonus.
For example, after cutting its investment banker headcount last year, Nomura is in the middle of a big hiring spree in the U.S., reportedly “incentivizing them pretty strongly to make it worth their while, either jumping up a level or making bonus guarantees for associates through MDs,” according to a source who asked to remain anonymous. In addition, that same source said that Jefferies is aggressively hiring associates and vice presidents for some groups, especially technology investment banking.
Looking more broadly, here’s where Wall Street banks are still recruiting in early autumn.
Associates and VPs in middle market banks
M&A boutiques are taking advantage of their new-found position on some of the biggest deals by bolstering their mid-ranks. Mike Brothers, a manager in the investment banking practice at Michael Page, a recruitment firm, says the focus is on associates and vice presidents right now.
“Banks know that if it is a seat that needs to be filled, that person is not going to forego a full year’s bonus, so they’ll make someone whole,” Brothers says. “Another scenario: A firm is expanding, it has liquidity and the budget to offer candidates strong bonus buyouts.
“On the candidates’ side, are people looking to move now because they want to get the buyout or are they truly looking to build their careers and take on a new or expanded role?” he says. “Firms are careful, and the challenge of buying out the bonus is there’s no way to verify what their bonus will be.
While associates and VPs are in demand, most people are not willing to make a move at this time, and it is not as common for small and mid-sized banks to be gung-ho to pay someone out this late in the year.
VPs in large investment banks
Large banks in the U.S. are also competing for the mid-ranks. Sarah Harte, executive director of global markets at Sheffield Haworth, a recruitment firm, says that it’s going to be VP and below where there’s going to be most of the hiring between now and the end of the year, even at bulge-bracket banks.
“The interviews currently happening are mainly at the VP level and more junior-level roles, which will still get hired at this time of year,” she says. “A lot of those you don’t really have to pay guarantees for – most juniors will move if they get a decent uplift on their base salary and at least some type of verbal guarantee for a bonus.
“It’s tough to get a specific guarantee this time of year, but they’ll look at the candidate’s compensation over the past few years, offer maybe a 20% uplift, shake their hand and bring them on board.”
As we pointed out, UBS in the midst of a hiring spree for a new restructuring team in New York. It's not the only one. At both large and middle-market banks, there has been a fever of activity in restructuring, largely because their teams are so lean, says Harte.
While cash equities desks continue to shrink, Harte says that banks are willing to hire elsewhere on their derivatives teams.
“There’s a lot of people moving across Delta One trading this year in New York and that’s probably going to continue into next year, as well as synthetics and prime,” she says.
Naturally, as quants take over both buy-side and sell-side firms, electronic and algorithmic traders and other front-office quantitative roles continue to be hot. Skills such as algorithm execution and derivatives modeling are in high demand.
“We are still very busy in the quant space, working across equity quant strats, hedge fund analytics roles, index strats and equity derivatives quant strats,” Harte says.
“For any of the quant roles, they really need people who have got PhDs in computer science, math or physics, and they need to have at least five years of experience in some sort of front-office quant role to be considered for a VP role," she says.
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