Life may have been pretty horrible for equity and debt capital markets bankers in the first half, but M&A bankers have - so far - had it pretty easy. While ECM revenues were down 85% in North America year-on-year in the first six months, for example, M&A revenues were down only 12% in North America and by just 5% globally according to Dealogic.
This helps explain why M&A-focused recruiters, particularly those hiring junior staff, have kept on telling us how busy they've been in the first six months: 2021 was a boom year for M&A; 2022 has only been slightly off that peak.
This could be changing. Technology deals in particular were down significantly in H1 according to Dealogic, which is probably why Credit Suisse jettisoned a TMT banker in its recent cuts. While there's still hiring at the junior and senior end across all sectors, headhunters predict that director-level staff will, as usual, be most exposed if and when cuts later in the year. Directors cost more than everyone else and don't bring in deals themselves.
However, some teams look more secure than others. As the Dealogic chart above shows, leisure and recreation, utility and energy and real estate and property deals are booming this year compared to last.
Real estate M&A teams at major banks have been doing particularly well. At Bank of America, Dealogic says the real estate team worked on deals worth 377% more this year than in the first half of last year. At Goldman and JPMorgan, real estate deals were up 98% and 69% respectively. At Citi, real estate deals were up 211%.
As deal pipelines start to look more precarious, there are signs that banks are doubling down on senior banker recruitment. The past few weeks have seen new MDs arriving at banks on both sides of the Atlantic: RBC hired Deutsche Bank's Kimberly Daly for its financial sponsors team in New York and Giuseppe Chiusa for its business services team in Europe; BMO hired Alex Choi from UBS for its industrials group. Credit Suisse has been rebuilding its team. Citi hired itself a new vice chairman from Deutsche Bank, for example.
Some of the most secure bankers in any future cuts are therefore likely to be the MDs added by banks in June this year. Existing staff will just have to hope that their guaranteed bonuses don't precipitate cuts elsewhere.
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