M&A bankers waiting for jobs to thaw: "Still a lot of hiring freezes out there"
It's half-term week for schools in the UK, and if you're an M&A headhunter, you're probably skiing. You might as well be: there's still not a lot of hiring happening in the sector.
"A lot of the big banks have hiring freezes and have finished making their major hires," says one of the rare London M&A headhunters not on the slopes. If M&A hiring recovers, it will be in the second quarter, says another who's still manning his desk. For the moment, banks are watching and waiting.
There's a lot to keep an eye on. Refinitiv, the data provider owned by the London Stock Exchange, says it's been a strong start to the year: global M&A activity was up 56% in January compared to '23. However, the increase wasn't distributed equally: Americas M&A was up 129%; APAC was up 39%; EMEA M&A declined 10%.
Unsurprisingly, banks are most bullish about building teams in America. UBS last week said it's doubled its Americas investment banking presence through the Credit Suisse acquisition and that it plan for business there to account for around 40% of its investment banking revenues by 2026, up from around one third in 2022. It's focused on building its presence in the technology, healthcare, consumer, and global industrials sectors.
For UBS, though, like Deutsche Bank, Lazard or Jefferies, future revenues need to justify already-expanded teams. UBS CFO Todd Tuckner said last week that the assumption is that the Swiss bank's investment banking revenues will double by 2026 as Credit Suisse bankers are onboarded. Tuckner acknowledged that this assumes "supportive markets." At Deutsche Bank, which added over 40 senior bankers last year, CEO Christian sewing said the origination and advisory hiring was in anticipation of a "nice uptick in revenues" in 2024. And at Lazard, where new CEO Peter Orszag plans to add 10 managing directors a year, the expectation is that the new hires will generate sufficient revenues to create a virtuous cycle in which the bank can afford to hire the next batch. There are already signs of increased M&A activity across technology, industrials, financial institutions, healthcare and energy, declared Orszag earlier this month, all sectors where Lazard has "deeply embedded networks."
For all the ebullience, however, headhunters say the situation in the market for people is quiet. Jobs are being cut rather than added: UBS, Deutsche, Rothschild and Lazard have all been trimming in M&A. "No one will hire while cuts are taking place," says another London headhunter. "There's selective hiring, but it's super-selective," he adds. "Bankers are saying the year has started more slowly than they'd expected"
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