Wall Street refugees are landing investment banking jobs well outside the canyons of Manhattan, according to a report by Bloomberg. More than half have landed jobs at midsize companies, defined as firms with a market capitalizations of between $250 million and $5 billion.
Senior investment bankers, with years of experience and well-established networks of contacts, are moving to boutiques and in many cases, taking client business with them. Some are crossing the Hudson to Jersey City, where Knight Capital Group Inc., has become the biggest US stock trader. Others are venturing farther west to firms such as Stifel Financial Corp. in St. Louis, Mesirow Financial Inc. in suburban Chicago, and others.
The collapse or liquidation of such Wall Street giants as Lehman Brothers, Bear Sterns and Merrill Lynch & Co. has opened up new opportunities for these smaller firms. Knight Capital, for example, is pushing into fixed income. Jefferies Group Inc., a Manhattan-based investment bank for midsize companies, has hired 170 staff since 2008 to beef up their fixed-income trading.
While boutiques are on the rise, some experts say the industry will still be divided between the mid-sized firms and the remaining giants, Morgan Stanley and Goldman Sachs. Even with recent cutbacks, Goldman is still 150 times bigger than a mid-sized firm such as Mesirow. In fact, net income at Goldman has soared 65 percent this year to a record $3.44 billion on the strength of trading and stock underwriting.