The summer is never a great time to move jobs in investment banking.
And the financial crisis that has been building throughout August and September has made banks even less eager to load up on expensive new recruits.
Investment bank executives say it is probably too early to start considering widespread job cuts, but they are beginning to look at their cost bases in anticipation of what are likely to be more difficult times than the boom period of 2006 and the first half of 2007.
The first sign of the slowdown will probably come in bankers’ year-end bonuses, which are likely to be down significantly on last year. But if the slump spreads to the rest of the economy, this could just be the beginning of a leaner period.
As a result, most investment bankers are likely to spend the rest of the year nervously watching the markets and wondering when – and at what level – the business will settle down.
That said, while the banking sector has been in crisis, other industrial sectors have been relatively unaffected, raising hopes that activity will not completely fall off a cliff.
One of the most high-profile moves in recent months has been that of Ken Costa, the veteran UBS investment banker, who moved to Lazard to become chairman of its international operations. He will also run Lazard’s operations alongside William Rucker.
Mr Costa, who has extensive contacts in boardrooms in Britain and across Europe, is, in effect, filling the gap left at Lazard by the departure of Marcus Agius, who became chairman of Barclays, the UK bank. But Lazard also said goodbye to Matthew Jarman, previously a rising star at the independent investment bank, who left to join Morgan Stanley.
Meanwhile, Credit Suisse filled the gap at the top of its Asian operations by poaching Kai Nargolwala, a director of Standard Chartered, to be its chief executive in the region. In London, Credit Suisse also hired Jim Rushton, an investment banker who has focused on the insurance industry, as a managing director in its financial institutions group.
The merry-go-round of bankers with knowledge of Russia continued when David Walker, who specialised in mergers and acquisitions in the country for Deutsche Bank, left to join Citigroup.
In France, Merrill Lynch hired Luc Remont, deputy chief of staff to Thierry Breton, the former finance minister, as a managing director in Paris, in an effort to beef up its relationships with French and other European companies. Mr Breton has joined Rothschild, the independent investment bank, as an adviser.
Evercore, the boutique investment bank, beefed up its London operations by poaching Edward Banks, a telecommunications sector banker, from JPMorgan Cazenove and Ian Ferguson, who has worked on aerospace and defence-related deals, from Merrill Lynch.
Even the leveraged finance business, particularly hard hit by the sudden slowdown and the drying up of demand among investors, was not completely moribund. Signalling hope that lending to private equity groups may undergo a revival next year, HSBC hired Tom Cole and Dan Toscano from Deutsche Bank to run its leveraged finance business in the Americas. HSBC also hired Nathalie Blyth, a consumer banker at Deutsche Bank, to strengthen its coverage of the sector in Europe.
