Introduction - Q3/Q4 2011 saw a significant slowdown in hiring across sector teams within M&A, Private Equity and Corporate Finance houses throughout the UK. And whilst bears predict more bad news is on its way in 2012 we here at Austin Andrew feel relatively upbeat.
Yes, bulge bracket IBD divisions are predominantly on a hiring freeze and are either reducing teams or just hiring to replace, but new and established independent advisory businesses and Private Equity houses are hiring across the following areas: Oil & Gas, TMT, Distressed and Restructuring and UHNWI Corporate Finance in the Leisure, Lodging and Real Estate.
The reason for the flurry of hiring we believe is down to a number of factors, some of which we have laid out for you below:
Investment Houses struggling to raise new funds are setting up Corporate Finance arms as a way of realising fees with relatively low additional costs (9 out of 10 already have relationships with clients from the investment side that need corporate finance advice)
Independent advisory businesses are able to snap up disgruntled “rainmakers” that are still seething about a poor bonus payments and a lack of clarity within the organisations they are working for. Whereas before these businesses could not offer a compelling business case to move, senior bankers now feel more comfortable moving to an independent advisory business which offer a leaner platform and higher bonus prospects without the risk of large proportions being in deferred stock.
Private Equity houses continue hiring at the Associate level as usual. Many of these businesses take a longer term view on their investments, and will look to promote internally within the business instead of hiring laterally at the senior level. Associate hires therefore are key to continued growth within many Private Equity businesses.
Salary Levels – Corporate Finance / M&A, the bottom line is you will fall into one of three categories; no salary anymore, Salary and no bonus, Salary and bonus (circa 50% of base), if you are the latter this will mean you are top ranked and highly regarded by your MD. Some Associates may have seen a better bonus than this for 2011. If you have then you are in the minority! For more guidance please call me on 020 7153 1676
Competition – The market has become increasingly competitive among candidates and clients throughout the course of 2011 and into 2012. The availability of the best M&A and Private Equity professionals continues to be extremely scarce resulting in interviewees often being involved in concurrent processes with different companies. Priortising your interview is essential.
Counter Offers – The number of counter offers have significantly reduced from Q3 2011 into 2012.
February 2012 – EMEA focused businesses will hire at the junior level or to replace, but buoyant hiring will remain in Emerging Markets focused teams, TMT, and Oil and Gas (M&A, Private Equity).