By Stephanie Baker-Said
Headhunters in London are being swamped with calls as clients look to pick off top talent and bankers consider jumping ship amid the market meltdown.
Hundreds of meetings and calls between bankers and potential employers took place this week in London after Lehman Brothers filed for bankruptcy, recruiters say. They continued even after Barclays, Britain's third-largest lender, agreed to buy Lehman's US investment banking unit. Lehman's European employees are waiting to see if Barclays or another bidder will buy parts of the international business.
"People are feeling insecure and want to know what their options are," says Jonathan Baines, the London-based chairman of Whitehead Mann, a recruitment company. "We are talking to clients who would like to cherry-pick talent at the managing director and business head level."
Headhunters say some of the demand is coming from banks looking to selectively fill gaps or smaller boutiques that want to scoop up talent. Some firms are looking to hire entire teams, focusing on those ranked by rivals in the top quartile.
The New York-based Lehman employed about 6000 people in Europe, mainly in London.
"There will always be demand at the top end," says Andrew Lowenthal, a London-based senior partner in global headhunting firm Egon Zehnder's financial services sector. "Individuals in very senior positions who were thought to be unobtainable are now potentially looking for new roles."
Some of Lehman's European-based bankers are attractive because of their strong client relationships. Top names include William Vereker and Alexis de Rosnay, who took over the European and Middle Eastern investment banking business this month, the headhunters say.
Other leading executives mentioned are Michael Tory, a former Morgan Stanley banker who has been head of Lehman's Britain's investment banking division since 2006, and Adrian Mee, head of European mergers and acquisitions.
Recruiters say hiring may come from unlikely quarters such as private equity firms or banks that have weathered the subprime crisis better than others. Yesterday, the New York-based private equity group KKR hired Makram Azar, Lehman's head of sovereign wealth funds, to run the buyout firm's expansion into the Middle East and Africa. Azar, an 18-year veteran of Lehman, is already based in Dubai.
Credit Suisse Group is looking selectively to add top talent, and is in talks to hire Ed Matthews and Stuart Field from Lehman's British corporate broking unit.
BNP-Paribas, Societe Generale, Macquarie Group, and N.M. Rothschild & Sons are taking the opportunity to beef up their investment banking operations. "When Lehman went bankrupt, the recruitment world went into overdrive," says Jason Kennedy, chief executive of the recruiter Kennedy Associates. "They're competing against other recruiters and for candidates."
The best headhunters are paid in advance to search out employees. They often receive additional fees depending on the situation of the people they recruit. Fewer jobs means the economics have changed, says Egon Zehnder's Lowenthal. "You don't have to pay a guarantee, and you don't have to buy out equity," he says.
Although senior bankers are still in demand, the prospects are bleaker for those further down the management ladder.
Financial firms around the world have cut more than 113,000 jobs since the collapse of the US subprime market.
Even before Lehman's demise, 20,000 jobs in London's financial district were expected to disappear this year and next, says the Centre for Economics and Business Research.
The number of new job vacancies in the City of London fell by 34 per cent in August compared with the same month a year earlier, says the British recruitment consultant Morgan McKinley. That report came before Lehman went bankrupt and Bank of America agreed to buy Merrill Lynch.
"There are very few places to put people," says Isabelle Martin-Hotimsky, who stepped down this summer as head of financial services recruiting in Europe at Korn/Ferry International. "All the firms are going to trim down and everyone will have a review of how many people they need."
Some areas will be hit harder than others. Senior proprietary traders will find jobs, either at other banks or hedge funds, says Martin-Hotimsky. Some in the fixed-income sector may need to shift focus as clients shun more complex products. Kennedy says those working in credit derivatives may need to retrain as high-yield or distressed-debt bankers and traders. "They will have a hard time," he says.
That hasn't stopped so-called contingency recruiters - who are paid only if they place a candidate - from targeting Lehman's lower-level employees. "Many of our clients have been inundated by firms they've never heard of," says Lowenthal. "They're saying that they won't pay a fee for an unsolicited CV from Lehman Brothers."
Near Lehman's offices in Canary Wharf, recruiters have set up in coffee shops, armed with notebooks and laptops, waiting to interview more junior Lehman employees.
Some of the recruiters say they are looking to place computer specialists, while others are targeting electronic trading sales staff.
"We have five to 10 times the number of résumés as usual," says Russell Leiter, a 25-year-old recruiter from Target Partners, standing outside Starbucks. "I don't think many placements will get done this quarter."