Credit Suisse people arrive at Deutsche Bank amidst enthusiasm for 2024
Is 2024 going to be a great year for investment bank hiring? If you're looking at Wells Fargo analyst Mike Mayo's predictions for 2024 investment banking revenues, you might think not. But if you listen to some recruiters in London, you'll already be breaking out the sparkling wines.
Andy Pringle, head of recruitment firm Circle Square, is among those feeling optimistic. "Next year could be a boom year for banking recruitment," he tells us. "It's about supply and demand and so many people have left the industry, that when people start hiring again, there will be shortages - probably for juniors and experienced mid-ranking bankers."
Logan Naidu, CEO of Dartmouth Partners, is also hopeful. Banks have rightsized their workforces to current market conditions, says Naidu: "With unplanned attrition and an uptick in market activity, I think many teams will find themselves understaffed again."
Optimism isn't unreasonable. Equity capital markets revenues at the likes of Barclays bounced back in the second quarter as bankers helped with "dribble outs, stake builds or share buybacks." Goldman Sachs is calling a recovery in M&A. And the cycle of rate hikes may be over. Past experience suggests that when dealmaking rebounds, tempered hiring of juniors during the downturn leads to staff shortages for several years after the rebound.
In the current case, Pringle says the disappearance of many bankers into roles like corporate development and asset management risks amplifying the lack of talent when revenues recover: "Capacity has fallen and that will be a problem," he predicts.
One bank that shouldn't have capacity issues is Deutsche Bank, which has spent the past year stocking up on both directors and managing directors and is now showing signs of moving down the food chain by hiring associates and VPs, particularly in ECM. Senior Credit Suisse bankers like AJ Coloma (Singapore gaming), Nick Williams (co-head US ECM), Guido Cerini (US infrastructure), and Rumesh Rajendram (European consumer and retail M&A) have only just arrived at DB after waiting out their notice periods. Fabrizio Campelli, head of Deutsche's investment bank, says there's even more hiring to come. M&A revenues at Deutsche were down 72% year-on-year in the second quarter, but speaking at the end of July, Deutsche CEO Christian Sewing declared that the "trough" in investment banking had passed and said there was already "clearly an uplift."
This doesn't mean everything will be great. Even Pringle is predicting another round of job cuts in September as some banks keep pruning. And some experienced banking headhunters aren't optimistic at all. "I wouldn't be in a mad hurry to predict a banner year for hiring in 2024," says one. "Without Credit Suisse, there are fewer players in the market," he adds cautiously. Many people let go earlier in the year are still trying to get back in, and still leaving the market.
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