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Front office market update – July 2013

In the second quarter of 2013 there was a marked increase in hiring across the spectrum of global banking and asset management in front office and origination roles, and in those credit analysis and portfolio roles that work closely with the front office.
In debt and structured finance we have seen growth in asset finance including leveraged finance funds who are hiring analysts and associates and at a more senior level in emerging markets derivatives in both structuring and trading. A specific and very successful focus for us is with the new direct lending funds, who have set up to provide an alternative source of funding to corporates, to fill the void created by the commercial banks’ lack of appetite for risk. Looking forward, Infrastructure debt funds say they are likely to hire in H2 2013.
On the other hand many banks continue to shed people and restructure teams. In some instances seniors are replaced juniors, though there have been some selective senior replacement hires.
Sell-side firms, in particular, are determined to have the most effective risk framework and we have successfully placed CROs in smaller IBs in H1. We are seeing institutions increasingly willing to retain where they value the depth of knowledge and approach this route can involves; a definite sign of an uptick in the market.
In M&A boutiques are starting to hire, and are starting to recognise that there is a candidate shortage at the analyst and associate levels so many are now considering ACAs coming out of accountancy firms. Sign off for hires at the bulge bracket banks continues to be a challenge and many of those firms continue to suffer significant attrition at the senior analyst/junior associate levels with people going to the buy side. Hence many teams are understaffed at the junior end. The broad sentiment is that sign off will pick up 2014, but the sentiment was similar a year ago about 2013. Deal volume has picked up so now there is a genuine argument to get more analyst/associate resource on board. We have successful filled mandates for boutiques and smaller IBs in Q2 at associate 1 and 2 levels.
On the buy side some mid-market PE firms are starting to hire again, plus some larger alternative asset managers and SWFs are selectively expanding their co-investment capacity.
Larger listed equities investors are continuing to be cautious in hiring, but most will hire the top 1% still opportunistically. Where they need to build up analytical capacity these firms are also targeting ACAs to do so.
In summary, while issues such as the reduction of QE, bonus caps, increased regulation, capital adequacy requirements and transaction taxes are a continued concern, for the moment the market shows genuine improvements from a recruitment point of view.
To speak to someone about your banking and financial services recruitment process, get in touch with Andrew Breach.
T: 020 7645 1437