Despite the headlines on executive pay cuts and headcount reductions, there are still a few areas where banks are looking to beef up their business and even add investment banking jobs.
One area is risk management, which will become a bigger priority for banks worldwide as they adapt to new and tougher financial regulations, reports the Financial Times.
In the UK, that means adapting to banking reforms introduced by Sir John Vickers’ Independent Commission on Banking. In the U.S., banks are already dealing with the repercussions of the so-called Volcker bill.
But on the job-search side, this means people who specialize in or have knowledge of liquidity risk will be in demand. So will those looking to fill internal audit and compliance roles.
In investment banking, some areas will still continue to grow in spite of widespread job cuts elsewhere. “We are likely to see demand rise within high-yield and investment grade fixed income teams across asset management as a result of current credit events,” according to Kay Senior, a director at recruitment consultant Badenoch and Clark.
There will also be greater demand for IT and digital media specialists, as the banks roll out new platforms to support mobile banking and trading services.
And lest you think all the bad news has scared off young people from working in banking, think again. Barclays CEO Bob Diamond told Bloomberg that in 2010, 107,000 university students sent in applications for jobs a Barclays. The number of positions open? Just 1,500.
“So there’s still a lot of people who want to come into the financial services industry, particularly for organizations such as Barclays that have a diversified set of businesses that are very focused on their clients and growing the business” said Diamond, as quoted in HereistheCity.
What about you? Are you as enthusiastic about pursuing an investment banking career today as you were, say, 12 months ago? Add your comments below.
When Warren Buffet is looking for a top investment professional, he looks for three distinct qualities. How well do you stack up against these three criteria, and communicate these qualities in your quest for an investment banking job?
The three criteria are intelligence, energy, and integrity, according to a recent story from CBSnews. Buffet says a leader having only 2 out of 3 of them can kill a business, or, as one might surmise, dampen your chances of landing that job.
High intelligence and high energy but without high integrity basically means you have a “smart, fast-moving thief.” Low energy but high intelligence and integrity means you have a “shop keeper,” not someone who is going to drive growth. And low intelligence but high energy and integrity means you have someone who will follow the rules, but not be great in the problem solving or vision department.
How well are you expressing these qualities in your job hunting materials? The article is written for the recruiter or person on the other side of the desk. But you could just as easily translate them for yourself. How well are you communicating your energy level? What sports or physical regimens do you have? Do you work out? Run? Practice a martial art or meditate? You need to demonstrate your capacity for hard work and endurance.
As for mental acuity, expect to be put through the ringer, taking various tests from games like “Connect Four” to making a presentation solving a financial or business problem. Shrewd interviewers may also ask you to give the same presentation over again, in half the time or cutting it down to one minute, to show your ability to think on your feet.
Demonstrating your integrity may be a trickier issue. They will likely perform a thorough background check on you. However, think of what you can do in terms of awards or service citations that indicate your strength of character.
Are you covering all these bases in your job-hunting efforts? How are you addressing the integrity issue? Add your comments below.
John Carney offers an interesting glimpse into the backroom negotiating techniques of investment bankers in a recent column for CNBC.
Carney was responding to an op-ed piece by former investment banker William Cohan who had attacked Mitt Romney and his Bain Capital cohorts as being a “bunch of jerks” in the negotiating process for buy-outs. Cohan says Bain Capital “gamed” the system by offering the highest price in the early rounds of bidding for a prospective company, just to get to the exclusive second round of the process. Then they would suddenly find all sorts of warts and wrinkles during the more extensive due diligence process, and start lowering their big, but only after all their competitors had been booted out of the process. Cohan accuses Bain of being particularly rapacious capitalists.
But Carney argues this beating down of the bid was not limited to Bain Capital, nor was it driven solely by greed. It was also a function of the normal and valuable risk management processes of creditor investment banks.
“Investment banks were typically not just found on the side of the deal where Cohan worked, arranging for owners of companies to cash out to private equity firms. They were almost always on the other side of the deal as well, providing the cash the private equity firms would use to buy the companies,” writes Carney.
These creditor banks would go through their own bidding process to win the privilege of financing a private equity firm’s buyout deal. But once they won that right, they, too, had the right to dig more deeply into the guts of the deal looking for potential problems.
Very often it was the creditor banks that forced the private equity guys to adjust their bids. “We cared a lot about managing the risk we were taking on with these loans. From the lending bank’s perspective, it often seemed like the private equity guys had been so eager to win the role of buyer that they had overlooked serious problems at the company,” writes Carney.
Of course, things went “off the rails” between 2005 and 2007, when M&A activity reached such a fever pitch that banks were rushing credit out the door at a frantic pace to keep up with their competitors. The result was astronomical acquisition prices and far less attention paid to risk and due diligence.
The process wasn’t always simple and it wasn’t always polite, says Carney, but it helped keep valuations in line with reality says Carney.
Have you ever been involved in one of these negotiating sessions in one of your investment banking jobs, either on the buy-side or sell-side, at an investment bank? Add your comments below.
