Activity might be picking up in M&A departments but that hasn't stemmed the flow of experienced bankers willing to make the leap into corporate in-house teams. Partly it's a case of unemployed corporate financiers taking any job on offer. Recruiters say that the candidate pool in M&A is still much bigger than the number of jobs available, and there are now more positions going at corporates. "The money's nothing like what you get in the good times at a bank, but we have got corporate assignments on our books at the moment, but not banking ones, which speaks for itself," says David Timson, senior partner of recruitment firm The Curzon Partnership.
However, senior bankers are also willing to make the move. One of the most recent is Robert Hougie, who was appointed senior vice-president, mergers and acquisitions, for InterActiveCorp in August 2003 after being a managing director at Lazard for 16 years.
Acquirers staff up
He joins a stream of senior investment banking talent to defect to the client side. Robert Jeffe left investment banking after 25 years, most recently his job was co-chairman of the global energy group at CSFB, to become senior vice-president for corporate business development at GE in December 2001. Brandon Burgess was appointed executive vice-president of business development at GE subsidiary NBC in January 2002. Before other positions in NBC and in the corporate planning group at PepsiCo, he worked in investment banking at Goldman Sachs in London and Frankfurt, focusing on real estate and corporate finance.
Before becoming senior vice-president of divestitures, mergers and acquisitions at Vivendi Universal, Robert de Metz worked on the executive board of Paribas between 1997 and 2000, where he was responsible for M&A.
It's easy to see how someone like Hougie would fit at such a highly acquisitive company as InterActiveCorp. At various times at Lazard he headed the media and internet groups and represented InterActiveCorp on several occasions while working at the bank.
But even if senior investment bankers want corporate jobs, the corporates may not want them. They are often looking above all for relevant industry experience from their M&A recruits, something that investment banking candidates can't necessarily offer.
"We hire almost exclusively corporate people, and most people I meet in equivalent positions in other companies are in-house guys, not ex-bankers," says Ian Smale, vice-president and global head of mergers and acquisitions at BP, who started as a geologist in the company. Smale says he receives between 30 and 50 applications from internal candidates for each job in BP's M&A department. "When there's huge competition for M&A jobs internally, it's unlikely that we'll find someone so experienced externally."
Senior bankers looking to move to a corporate for a chance to direct the M&A show should be warned that it won't be easy to find a job. "There's definitely still a trend in this direction, but for senior bankers it's really tough to make the move," says Maurice Toueg, recruiter at the US Foster McKay Group. "There are fewer positions available at a senior level and compensation problems. Also, bankers without corporate operations experience are less in demand." He says, for example, that he has a job going for head of M&A for a multi-billion retail firm but that the company has a strong preference for a candidate with corporate sector experience.
For the companies themselves, the other problem in recruiting professional dealmakers is that it's in their nature to go out to look for deals to do, which can be at odds with the generally more cautious corporate ethos. The ones that are most likely to hire ex-bankers are very active deal makers, such as GE and Vivendi.
Toueg's advice to companies that do want to get a banker on board is that they ought to hire now before the market picks up. "We're encouraging corporates to hire while they can as some of the banks are starting to hire again. We think 2004 will be even more aggressive if the market pace continues to accelerate."
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