Wall Street firms are beefing up their commodity trading desks in an effort to diversify their revenues. This comes as their derivatives trading activities are facing increasing regulatory oversight.
According to a report by Reuters, firms are hiring specialists who can buy and sell physical commodities such as liquefied natural gas, crude oil, iron ore and coal. And they are offering top salaries that match the levels seen at the end of the most recent commodities boom in 2008, in an effort to poach top traders from other companies.
The big bucks are going to senior, high-producing traders. This includes compensation guarantees of $5 million or more for the top performers in the industry. The norm for solid performers is about $1 million a year, including base pay of $400,000 plus bonuses, according to George Stein, managing director at Commodity Talent LLC in New York, who is quoted in the article.
Some investment banks, such as Goldman Sachs, have simply purchased entire trading teams such as their deal to acquire North American gas trader Nexen. This year, JPMorgan Chase acquired part of oils and metals trader RBS Sempra, as well.
Do you have commodities experience? Have you seen an uptick in hiring or movement among your peers? Let us know in the comments section below.
Spring has traditionally been the time when bankers and traders think about switching firms, after pocketing their bonuses from the previous year. This spring appears to be a particularly busy one, as bankers take advantage of healthier bottom lines and a gradual thaw in investment banking job hiring.
CNN Money reports that senior bankers, especially those with substantial M&A experience, are on the move. One recent survey of 1,400 financial professionals reports that three-quarters of those polled had been approached by headhunters.
The poaching of financial veterans from rival firms has been proceeding at a brisker pace than any time since before the financial crisis hit in 2007. Many banks are ramping up their hiring to deal with the wave of merger activity that has kicked in recently, and is expected continue through the year. Thomson Reuters reports that mergers and acquisitions are up 24%, compared to a year ago.
The CNN article quotes John Rogan, partner at the executive search firm Russell Reynolds Associates, as saying “M&A experience is at a premium,” especially for those who have worked on energy and bank mergers. Equity and fixed-income traders are also in demand as many Wall Street firms try to ramp up that part of their business.
The hiring frenzy is not, apparently, extending to associates with only a year or two of experience. Nor does it seem to apply to new managing directors, who come with a high price tag but not the extensive experience of more senior level directors.
What’s your take? Are you seeing increased mobility among your peers or at your firm? Add your comments below.
Although some sectors, notably private equity and venture capital, are still lagging, the pace of graduate hiring of newly minted MBAs is picking up, according to a Wall Street Journal article.
However, grads-to-be can’t simply rely on the traditional on-campus recruiting push by companies. They now have to step up their individual networking and job search activities, much like their more experienced counterparts in the workplace, to land that elusive first investment banking job. As one on-campus career services director puts it, this is “the year of the networked job search.”
And just having an informational interview or exchanging emails with alumni contacts isn’t enough, either. MBA students must focus their efforts and do deep research on a handful of companies they’d most like to work for.
There are hopeful signs on the horizon for investment banking. Many B-schools report that next year’s graduating class should do better in landing investment banking jobs. That’s because both investment banking and consulting firms have stepped up their internship programs this year. According to Michelle Antonio, director of career management at Wharton, this will have a big impact on the number of new MBAs getting full-time job offers before graduation next spring.
Are you a recent MBA grad? What has your experience been in the past two years? Add your comments below.