The following perspective on equities staffing is from Oliver Rolfe, who heads Spartan Partnership, a London-based executive search firm specializing in equities recruiting.
Over the past 6 years the world of equities has taken a dramatic turn which has left hundreds, if not thousands of talented analysts, sales people and traders out of a job they loved so dearly. However in 2011 I had predicted that we would see an uptick in the equity world by September/October of 2013 that would spark the new, albeit slow beginning. This is has happened and the time is now to reorganise and structure any bank or broker to mirror their core values or fear the potential of being swallowed by the markets.
In the years following 2008 and the financial crash, equity markets have wanted to rebound as quickly as they had fallen. In 2009/10 we had a false dawn that had seen many firms either merge with one another, significantly reducing in size or shutting down altogether. With the global governments pumping in billions of dollars in to the financial system we had to see some improvement.
From the CEO’s and founders I know personally, the consensus view was one of crash to boom to bust, and finally to a settled level. The Wall Street Crash in the 1920’s took circa 15 years to recover and we now are 8 years down the road from our latest crisis. Although we are on uncertain ground, with the likes of Espirito Santo more recently, we will continue to ride the curve both up and down until it levels off again. Throughout this time period you will see the cream rise to the top and hiring become more specialised and focused, but you will definitely see it.
Recruitment, since September/October 2013, has seen a real rise in opportunities both on the buy-side and sell-side. Whilst the buy-side has been happy to take talent of any age and sector, the recruits on the sell-side have been much more specific and reliant on seniority and a strong client franchise that would benefit the hiring company on revenues and client base.
Due to the pool of talent in the City of London dwindling dramatically in recent years, from those either leaving or being pushed out of the market, we will either see a rise in the cost of hiring and bidding up to secure talent or there will be a drive towards hiring individuals from consulting and accounting firms.
We have seen the likes of Oliver Wyman, PWC, Deloitte, Gartner & many other consulting firms be a hunting ground for asset managers, hedge funds & investment banks globally. This is driven towards hiring more sectorially focused analysts that would be in line with a banks strategy across their verticals or the buy-side across their funds. Additionally, the increase in hiring consultants will also come as a further service to clients on both the buy & sell side in a market that is screaming out for a full service.
Personally, I do not see how we can afford to increase costs in these markets but I do expect the best to get paid whilst banks and brokers look to hire the new breed of analysts outside of the market at a considerably lower cost.
We have seen a big jump in the number of US firms entering the European market and we have personally been building teams to attack the market share of JP Morgan, Citi, Morgan Stanley and BoA-ML as their service to clients worsen and they lose their way. The time is now for the mid-tier to gain market share and profitability, the market place; is Europe. We see Sterne Agee as an example of a firm which has been building it’s equities team, and is one to watch, now and in the future, for US Equities in Europe.
With the FSA, no sorry, FCA, let’s just call them the City Police banning the payment for corporate access with client commissions, we have seen some companies being heavily affected. None more so than Atlantic Equities, the US Equities broker famed for their strong corporate relationships. It is said that a number of Atlantic’s clients have halved the number that they can pay the firm, and in some cases more than half. Atlantic has made some tough decisions and have cut two founding partners as well as individuals in sales and research, whilst losing some analysts to competitors – the world has changed and all companies must restructure and compensate for this loss, now and in the future.
Spartan Partnership offers an executive search capability within Global Equities, including Equity Research, Equity Sales, Equity Sales Trading and Equity Trading. As a pure Equities search firm, Spartan provides a consultative approach, adding strategic advice, human capital growth and organisational development. Founder Oliver Rolfe has over a decade experience in equities recruiting, assisting clients in building their global offices, departments and teams. For more information on Spartan Partnership please visit www.spartan-partnership.com or contact Oliver Rolfe, Founder & Managing Director at +44 203 440 5885 or +1 646 688 2393, firstname.lastname@example.org.