The below commentary is written by Lewis Matheson, complimenting the M&A People Moves Report. (Available below)
A slower recovery than initially expected. With inflation almost 5% above the target rate in the UK, the bank rate remains increasingly high, having a flow on effect to M&A transacting across the market. The largest full service investment banks remain mostly frozen on lateral hiring but budgets and headcount reviews are taking place and suggest a higher level of demand once bonuses are paid out in Q1 2024. There are also areas of the market that remain robust through difficult periods as explained below.
Certain sectors have shown resilience against a difficult environment including financial services, infrastructure & energy transition, with increasing demand across the industrials & Business services sectors. The firms that are laterally recruiting are mostly targeting Associate hiring with some opportunistic senior moves due to an increased candidate pool. Some of the larger full service investment banks including Goldman Sachs and Bank of America have mostly only hired graduates this year with a blanket hiring freeze across each bank. We have seen more commitment to hiring from middle market boutiques and specialist M&A firms. Despite a lower level of people moves this year, looking forward we are seeing more opportunities arise in Q4 and expect a gradual adjustment to a more active market
The market has been tight this year with a low level of lateral moves. We have seen little movement at the Analyst level, with firms opting for internal internships and graduate programmes over external hires. Lateral movements at the Analyst level only account for roughly 15% of the total number of new starters, a lot of which was the result of the Credit Suisse acquisition by UBS. Associate and Vice President hires are down considerably and some firms have picked up senior talent from other firms opportunistically. Large cap M&A has been the most heavily impacted given current deal flow. Comparatively, smaller mid-market players have been recruiting at a higher rate compared to the largest full service investment banks, such as DC advisory and Houlihan Lokey. There has been a range in appetite to recruit across the largest firms with Deutsche Bank, Citi, JP Morgan, Evercore, PJT, and Moelis having been more open to bringing on senior deal makers.
Within this report, we tracked over 390 job transitions within the UK and European market. Only 27% of these were female, with the majority of these (83%) at the Analyst level. There is a huge demand for female talent from areas such as private equity, hedge funds and corporate roles which results in lower female representation at the more senior levels. Of the people moves observed, the following percentages reflect the portion of female candidates: 45% of Analysts, 26% of Associates, 25% of Vice Presidents, 17% of Directors, and 4% of MDs/Co-Heads.
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