Making the right move in fixed income

Banks jump to hire new staff. Only experienced staffers need apply

The bad news is that they are looking for people with specific skills to help build out businesses and are not likely to offer big pay packages.

The banks that are hiring at the moment are not established market leaders but those still seeking to build out their European debt platforms. Some have been on a hiring drive for a while.

Niall Cameron, global head of credit markets at ABN Amro, has been increasing his team since the end of last year and is still seeking staff. The bank has been hiring in every area, from sterling credit and leveraged finance to government bond trading and asset-backed securities. It is about to announce some new hires in its north American debt business, the focus of the next expansion drive. Cameron says he will also build out the structured credit derivatives business in Europe into the second half of the year and plans include expansion of the European ABS team.

Rob Jolliffe, head of primary markets origination at Royal Bank of Scotland, has had a mandate to hire and increase the bank's European presence since he was recruited from Goldman Sachs last July. Last year, RBS planned to increase the headcount in its financial markets division by 25%; this year the plans are even more ambitious.

Other banks have shown their hands more recently. SG announced in June that it wanted to recruit 150 staff in fixed income and equity derivatives. Thirty will be new European fixed-income hires to push SG up the league tables in capital markets, structured finance and derivatives. "We are looking for someone with three to four years' experience, or graduates," says Grégoire Varenne, global head of interest rate products at SG. The bank began hiring at the beginning of the year and are about half way through this drive. Varenne says the trading side is pretty well in place, but more sales staff are needed.

Banc of America Securities has also stepped up its efforts to expand its European debt-capital-raising and risk-management businesses since January, albeit from a tiny base. "We are slightly up in headcount on last year, even though the emerging markets business has been downsized," says Arrington Mixon, head of debt for Europe, Middle East and Africa for Banc of America Securities. In March, the bank hired JC Perrig, a European origination head at CSFB. "It's great to have JC Perrig and strong originators, but we also need to continue to build our capability in distribution, trading, sales and research. With regard to this, we are looking for talent with European experience," says Mixon.

The bank has been gradually adding to all these areas since the start of the year, but Mixon says it is now looking at building out its trading platform in particular. "Bank of America should be one of the best traders in Europe of US names," she says. The bank will be expanding in leveraged finance next year and in the financial institutions group.

The other bank whose new European fixed-income management plans to expand its platform is HSBC. It already includes the high-profile hire of John Studzinski, who was deputy chairman at Morgan Stanley until March. With Stuart Gulliver, who has come from Hong Kong to run global markets, he will co-head the global corporate, investment banking and markets business, with combined responsibility for debt trading, origination and sales.

Now headhunters are waiting for the bank to start hiring, particularly in distribution. However, HSBC also has a reputation for growing slowly and promoting internally, so external recruitment will not be on the scale of ABN Amro or RBS. "HSBC are looking to hire in very strategic key roles; they are not going to be taking on 20 people," says a headhunter.

Traditionally, the hiring season is pretty much over by this time of year. Banks tend to be reluctant to hire in the second half because they are unwilling to recruit someone from a competitor who has to complete three months' gardening leave and then pay them a full 2003 bonus for three months' work or less that year.

This is not so much the case this year. SG's Varenne is expecting that half a dozen fixed income recruits will join the bank in September and that a few more candidates will join the bank before the end of the year. "The problem is that if we hire someone now, they will not be on board until late in Q4," says Mixon at Banc of America Securities. "But if we wait until next year's bonus cycle is complete, we are probably looking at early second quarter." So the bank will carry on recruiting this year and will soon start interviewing for next year's hires. "While you will continue to see us making select strategic hires this year, we are also planning where we want to be in 2004 and finding the people who will help us achieve our goals," says Mixon.

Varen, Cameron and Mixon: seriously seekingpeople with skills, experience and an entrepreneurial spirit

For those who may be tempted to make the move, the main incentive that all of these banks are pitching to candidates is the chance to shape a growing business. Cameron at ABN Amro says he is looking out for people who want to be entrepreneurial, who are "business people, not just bankers". Mixon at Banc of America says the bank entices people away from the more established fixed-income houses in Europe with the promise of more influence and that there are not going to be several vice-presidents lining up patiently for one available director slot.