ABS recruitment trends assessed

As confidence gradually returns to the structured finance market, the associated job market is also seeing increased activity as banks look to rebuild in certain areas. However, demand is still centred on those with experience in structured finance or structured credit, rather than on fresh talent.

“At present, most demand in the structured finance field is focussed on valuations, structuring (restructuring) and trading roles,” says Ikenna Iroche, consultant at Correlate Search in London. “Many of the banks are still looking to offload legacy positions, so client-savvy traders with the ability to find and negotiate with suitable buyers of these assets are particularly sought after.”
He adds: “On the more traditional sell-side, however, there is not so much demand for pure sales roles, although there are opportunities for true product specialists in product management roles which involve marketing to key investors.”  A second London-based head hunter reports that the bigger banks, such as RBS and Lloyds, have been hiring for structured finance roles, but this is more to do with replacing people who have left. In terms of level, there have been a few senior hires but most are at a more junior level.

“In sales, there’s still latent capacity in a lot of the teams: teams that could be doing twenty deals a year are only doing five, so there is not very much hiring,” he says.  UBS, Bank of America Merrill Lynch and Morgan Stanley have also been taking on a number of new hires in this sector in the past few months, with recent examples including Rohit Sen moving to BoAML from Goldman Sachs as an ABS trader and Matt Zola joining UBS to run global structuring within securities distribution (SCI passim).

“They want people who really understand the nitty-gritty and how things work – they are not looking for people that are new to the game,” the second head hunter confirms.  It’s a similar story in the US. According to Chadrin Dean, consultant at Integrated Management Resources, there has been a definite uptick in demand for those with backgrounds in structured credit in New York in the past couple of months. “There’s demand for both buy-side and sell-side roles, mostly for the repackaging, analysis and pricing of legacy assets with the majority of demand coming from banks and hedge funds,” he says.  Other roles are seeing limited hiring activity. Demand for structurers of new transactions is still lagging and, given that the primary market has not yet re-gained a lot of momentum, banks are hesitant to hire in anticipation of a rebound.

“It’s worth remembering that when the crisis initially hit, many banks re-allocated structured finance staff to other parts of the business and may want to examine the internal talent pool before looking outside,” comments Iroche.  Dean adds: “In some cases banks will look to the internal talent pool, but generally only for very junior roles. External searches will be used for levels such as vp and directors.”  Analyst and strategist positions are seeing some degree of hiring activity, with one recent example being Bank of America Merrill Lynch’s appointment of Srikanth Sankaran from UBS to head up its ABS research team in Europe (see last issue of SCI).”There is quite a balance in terms of the candidates that are in demand, but we are beginning to see more analyst roles,” says the second head hunter. “However, I think we need the election out of the way before anything can go forward. There are many issues which must be resolved, such as whether regulation will be light touch or will it be intense. I think there are a few people who are waiting until September or October to re-evaluate hiring policy.

Indeed, the question of banker compensation is still under the spotlight and remains politically charged. However, while new legislation limiting bonus payments has, to some extent, been mitigated via higher base salaries, banks are not being as competitive with compensation as the levels that are being reported, according one head hunter. “In terms of new hires, institutions are not willing to over-pay. There are some banks who have adjusted salaries and some that haven’t. Very rarely is an institution willing to pay a far higher salary to bring someone on board where the present employer has adjusted the overall compensation balance in favour of salary but the new employer hasn’t,” he says. “It is not an issue yet because at the moment we are moving people to better institutions so most candidates are willing to forego a higher salary because the bonuses will be higher,” he adds. Dean concludes that banks are not necessarily being as aggressive on salaries as before the crisis. “There’s a lot of advantageous hiring going on for those that accepted lower salaries for positions during the crisis,” he says. “New compensation levels are therefore not always higher than they were pre-crisis. Plus, there’s not a huge bid: there’s plenty of supply for places.”