Bank of America has hired almost a quarter of all the managing directors to have moved between the 10 top bulge bracket firms globally in 2019 as it has rebuilt the top ranks of its investment banking business.
In a year when global investment banking revenues are down approximately 15% and IBD hiring in Europe and Asia is down 40-50%, senior hiring in the U.S. was level with 2018 at the half year stage and is likely to decline 5-10% at most over the whole year, according to the search firm Sheffield Haworth.
While Goldman Sachs surprised many by its volume of hiring in 2018, BofA stands out clearly front in 2019, with at least 27 MDs hired globally, of whom 19 were in the US, six in Europe and two in Asia. This represents approximately 25% of MD’s hired among the top-10 global investment banks.
BofA's M&A MD bonanza follows the bank’s announcement nine months ago that it would recruit 50 new MD’s in investment banking after losing market share in 2018, chasing a top-3 market position with hires in coverage, mergers and acquisitions (M&A), global capital markets and Middle Market investment banking.
Most competitors have reduced their hiring volumes as fees have shrunk. UBS ranks next with 10 hires in the US and 18 worldwide as it has reinvested in its businesses globally. Amongst M&A boutiques, Greenhill (9) and Evercore and Lazard (7 each) stand out as they also chase a growing share of the global M&A fee pool. Citigroup hired seven managing directors in the U.S., including Mark Hantho and John Eydenberg, two heavy-hitters from Deutsche Bank.
U.S. IBD hiring has been remarkably resilient in the context of competitive market conditions as banks move to secure talent for 2020. “The US recruitment market for senior investment banking talent is in much better shape than in Europe and Asia, where corporate finance fee pools have dropped considerably and where hiring is down sharply year on year. Global sectors like Healthcare and Technology have seen extremely high levels of hiring in the last 12 months,” said Julian Bell, Regional Managing Director of Sheffield Haworth in New York.
In contrast, firms outside the US ‘bulge bracket’ have suffered heavily from hiring raids, with Deutsche Bank losing 16 managing directors in the U.S. and 26 worldwide, even while hiring 11 MDs in the first half of the year. Some commentators suggest there is a move towards a ‘super bulge bracket’ as American banks invest while Europeans pause or retrench. One way or another, U.S. banks are generally taking an increased share of the global fee pool and Europeans are struggling to retain talent.
Net, Sheffield Haworth's figures suggest that only three 'new' MD-level M&A jobs were created for managing directors in the U.S. so far this year. While big investment banks have ended up with 24 fewer MDs after leavers and arrivals are taken into account, full service investment banks and boutiques have ended up with 19 and eight more respectively.
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