Mulsanne Opinion – Q1, 2014 April 2014

Mulsanne Market Overview

Our Q1 market overview indicates a continued, yet measured, hiring appetite. Whilst there have been few significant build outs, activity has been noticeable in specific areas including Technology, Associate/VP level in the IBD space, and both ABS and infrastructure finance teams. Mostly, hiring seems to be planned for execution in Q2 2014.

Despite continued new issuance in Q1 and a general confidence in future credit market growth due to a recovery in the M&A cycle, the banks’ stance is that they have sufficient manpower to cover those markets in which they need to maintain a presence. Whilst there have been a limited number of moves in this market, they have largely been driven by banks replacing “resignations” or hiring strategically. The structured side is improving, and hiring is strong across the ABS and CLO spaces, as well as on the real asset side, including infrastructure and real estate.

With several banks affected by regulatory probes, hiring in FX has been patchy. Many businesses are looking at how to best structure teams moving forward. However, with low profitability in the G10 markets, few banks are looking to upscale; most are filtering through staff from the more junior levels. Emerging markets FX has been more volatile and there remains demand for good talent in this space.

Interest Rates:
Due to a difficult 2013 across flow and structured products, hiring across the interest rate space has remained restricted. Tougher regulation and lower client activity since the financial crisis have resulted in a number of banks shifting resources away from rates operations. As such, hiring managers have been reluctant to add to existing headcount levels. Hiring in this space is expected in Q2, but will be driven by replacement hires, rather than growth.

Investment Banking:
Q1 has continued to see an increase in hiring activity. The growth in deal flow has resulted in teams being stretched with banks keen to hire, particularly at Associate/Junior VP level where candidates are in great demand. The bonus round delivered a strong message to key senior MDs and Associate level bankers, where both were particularly well paid. There is a definite push by the banks to retain business generators and junior resources.

Private Banking & Wealth Management:
The market in Q1 has been dominated by bonus announcements. Coutts made headlines with their cut in the bonus pool. Most other houses were either unchanged from last year or more aggressive with their payments. This indicates resilience within the market. Hiring continues, particularly within three key areas: UK Domestic, UK Res Non Dom and the Ultra High Net Worth / Family Office space. This is expected to continue into Q2, traditionally the year’s busiest period for people moves.

Emerging Markets:
Despite the turbulence Emerging European markets (including Turkey) have experienced in Q1, we are noticing strong interest in this part of the world from a number of international banks. The focus has shifted from high-risk and balance sheet business to low-risk operations and commissionable products, such as cash management and trade finance. Elsewhere we are observing considerable interest from banks for experts in credit and operational risk.

In Q1 we have seen a marked increase in activity across the technology sector as a whole, with a number of senior moves taking centre stage in both Banking Technology and the larger technology firms. Cloud, Business Analytics and Intelligence are priorities for the year and, with Heartbleed’s emergence, security is once again at the forefront. The Fin Tech market expansion continues unabated in EMEA and North America, with aggressive growth projected globally, and LATAM is earmarked to be a key region for many tier one players. Organisations continue to hire sales and presales teams to meet their ambitious plans. Focus areas for expansion and growth are Data Analytics, Payments and Security.