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Seize the opportunity – the market needs the middle people

26/08/16

As we head into the August bank holiday weekend, we reflect on a summer period that has been rather quiet this year, more so than usual. Holiday season is always slower for business however the fall out from Brexit and a generally more conservative market has seen less hiring and more people take that extra week off. 

The common sentiment immediately after Brexit has been that “it’s business as usual, until it’s not” for most, although there has been some fallout. Most notably the huge back up of IPOs – the value of European listings has fallen 55% compared with the same period in 2015 according to Dealogic. It makes sense that launching a new IPO would be harder if everyone’s current investments are already being affected by volatility. Additionally, many private equity funds that were in process of investing in UK assets used Brexit as a bargaining chip to revalue those assets, stalling deals or even causing them to collapse.

Given the mid-markets reliance on PE transactions taking place, this caused an initial squeeze on deals, with transaction services teams the worst affected.  Subsequently there’s been a general pause on hiring in professional services’ firms across all the advisory verticals of transaction services, lead advisory/M&A and business modeling. Junior hires, on the whole, can be found internally at most of the Top 20 practice firms and senior hires are too much of a risky investment at a time of uncertainty and volatility. 

At the banks it’s been a similar story, junior and graduate recruitment has been cut back as well as some analyst grades being made redundant. Senior VPs, directors and even some MDs have been made redundant over the course of the past 12 months to cut costs in a generally tighter market and this has been exacerbated by the Brexit decision. 

NHS Chief Executive, Simon Stevens said “when the economy sneezes, the NHS catches a cold” and this outlook gives the impression that the M&A market caught the very same cold on June 23.  

That being said, distress can also present an opportunity to pick up some cheap deals. UK inbound deal value in July 2016 ($37bn) was four times the value registered in July 2015 ($9bn) and three times the average July value ($12bn) over the last 10 years. Albeit cost is not the only determinant of deal activity, it seems the UK remains an attractive prospect for overseas investors. There are still deals to be done! 

A tighter market may mean less investing at the top and bottom end, but with plenty of leg work still to be carried out, firms are looking to invest in future leaders that already have an idea what they are doing. 

Right now, perhaps more than ever, there is a need for bright and capable mid-level management in the market. Transaction services is crying out for experience in the form of managers, senior managers and associate directors. The Big 4/Top 6 are grappling with each other for the best people and will pay appropriately for the right talent. The smaller firms have consistently been in the market for employees able to lead projects who are keener to work in a boutique environment and culture. The boutique investment banks that are looking to hire are, on the whole, only looking for senior analysts and junior associates (those with 3-5 years of experience) and many of the “elite” independents are aiming to stock up on the same talent. 

People who can run a deal, manage a project and lead with capability and hold everything together are really valued. It is expensive and time consuming to hire a graduate these days. 

Hence, if you’re in the bracket of manager, senior manager or AD, or 3-5 years experience in a bank and at the point where you could use a fresh start, fresh prospects and possibly a tidy uplift on salary, it’s a great time to put some feelers out or have a discussion with your boss to see just how much they want you. It could not be a better time to get in touch with us to see what options you would have. 

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