If banks are going to cut jobs in their investment banking divisions, they will do so after September 5, or Labor Day in America.
As veteran banker Ken Moelis put it: talking to investors after the announcement of the results of Moelis & Co. last week, the boutique investment banking firm he heads that takes his name.
“I have worked in big banks. The word gets out right around Labor Day to look at your count in a bad year,” Moelis said.It’s just how the cycle works… They focus on the bonus pool somewhere in September.”
If the banks want to preserve the bonus pool for high performers, they may have to make some pretty drastic cuts to the workforce of their investment banking divisions (M&A i capital markets). US banking analysts at Deutsche Bank noted that investment banking fees fell 48% at US investment banks in the second quarter, with equity capital markets (ECM) down 79% ), 50% debt capital markets (DCM) and 12% mergers and acquisitions advice.
Despite the serious income, Moelis himself indicated that he has no intention of cutting heads. Instead, he said Moelis & Co. will be “aggressive” in hiring as other banks pull back. The firm has already added two CEOs in the last quarter, inclusive John Kim from Evercore. M&A and restructuring revenue will rebound, Ken predicted. Although the market is currently digesting “everything bad news as you can imagine,” Moelis optimistically predicted that M&A will lead the way in this upturn and that activity from financial backers (private equity firms) will pick up first. Until then, he said Although vanilla ECM and DCM deals are difficult to get off the ground, there is still a need for financing and Moelis & Co benefits from structured financing arrangements.
Ken’s hype comes as Lazard also sounds pretty positive. Peter Orszag, chief executive of Lazard’s advisory business, said Financial news plans to make 10-15 general manager hires this year healthcare, technology, media, German market and private credit. Citi is also hiring bankers focused on technological, health and financial services.
Recent weeks have seen the arrival of several senior recruits in new roles. Adrian Beidas He is believed to have moved from UBS to Barclays in London. Javed Jinnah has appeared at Credit Suisse in New York as MD in Insurance Investment Banking. George Kacharava came to BofA in London as vice president of technology banking, for example.
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