"These will be Wall Street's most in-demand positions next year"
Job cuts and shrinking bonuses dominated
headlines from Wall Street this year, so it’s easy to forget pockets of the
industry are booming. Plunging oil prices, the Federal Reserve’s first rate
increase since before the financial crisis and the collapse in junk-rated debt
are creating opportunities for some bankers and traders, spurring hiring and
raises.
Analysts,
recruiters and executives deem these the best jobs to have in 2016:
Oil and Gas
Bankers
Investment
bankers advised a record $4.2 trillion of announced mergers and acquisitions in
2015, led by blockbuster deals in pharmaceuticals, telecom and technology
companies. Which industry is ripe for the next wave of consolidation? Battered
by oil’s plunge, energy companies will need to lean on bankers in 2016 to shore
up equity or sell themselves to stronger rivals. “When an industry blows up,
you usually get a couple of really good years,” said Brian Foran, a partner at
Autonomous Research LLP. “It’s similar to banks in 2008 and 2009, when you had
some of the biggest acquisitions ever and it was phenomenal for financial
institutions bankers.”
Restructuring
Bankers
Rising defaults,
widening spreads on high-yield debt and climbing U.S. interest rates mean
restructuring desks have a big year ahead, according to Vincent Hung of
Autonomous Research. Those bankers advise debtors or creditors when companies
need restructuring through asset-sales or in bankruptcy. Boutiques including
Houlihan Lokey Inc. and Lazard Ltd. dominate the field (megabanks are more
often conflicted as creditors or underwriters), and the firms could see a 24
percent jump in restructuring revenue next year, Hung said in a Dec. 18 note.
Rates Traders
Rates traders
already are poised for some of this year’s biggest raises, with those handling
options due for a 15 percent increase on average, according to recruiting firm
Options Group Inc. Trading government bonds and related instruments should
remain strong in 2016 as the Fed tightens monetary policy while the European
Central Bank loosens it, JPMorgan Chase & Co. Chief Financial Officer
Marianne Lake said this month. “You finally have an outlook where major central
banks are going in different directions,” Foran said. “That just creates a lot
of activity.”
Electronic
Trading Personnel
Banks need
traders and quants to improve platforms that help clients make and manage bets
across multiple assets and markets, said Jessica Lee, an Options Group director.
“A lot of hedge funds have done a better job than banks at integrating
electronic platforms to trade cross-asset,” Lee said. “You have people at
high-frequency trading platforms who’ve never worked at a bank who are actually
going to banks now.” Those who jump from hedge funds can typically expect a 25
percent pay raise when joining a bank, she said.
Fintech
Bank executives talked a lot in 2015 about the need to
learn from other industries that got decimated by Silicon Valley disruptors.
Next year, more banks will unveil pilot programs that automate investment
management and make use of technology based on bitcoin’s blockchain, the
software ledger that can speed up financial transactions. “Banks are really
aggressively hiring IT and data-management to do anything around blockchain”
and other financial-technology areas, said Robert Dicks, who runs the human
capital practice for financials at Deloitte Consulting LLP. “They look at this
as part of their infrastructure, part of the capabilities they need.”
Customer-data analysts, compliance analysts and cyber-security personnel also
are in demand, he said.
Corporate Finance
While investors
have shown heightened skittishness this month about holding risky corporate
debt such as leveraged loans, some areas of corporate financing are expected to
flourish next year. Continued merger activity will drive investment-grade debt
issuance, even with rates rising, Jim Amine, head of Credit Suisse Group AG’s
investment bank, said in October. He and others have predicted a pickup in
private placements, and banks are increasing their efforts to market
derivatives to corporations as they raise capital.
Junior employees
Unless you’re the
star of the desk, it’s good to be junior, according to recruiters. In the wake
of the financial crisis, many departments slowed hiring and shrank, and workers
who survived the cuts then stuck around longer to make up for lost earnings.
That’s left many desks with a dearth of employees with five to seven years of
experience, warping the typical shape of organizations’ ladders so that they’re
thin in the middle, said Paul Sorbera, president of New York-based search firm
Alliance Consulting. Demand for analysts, associates and vice presidents “is as
strong as I’ve seen it,” Sorbera said. By contrast, “there is an overwhelming
amount of senior people in the barbell at the top.”
Wealth management
Top-producing
financial advisers have never been more in demand. The steady revenue and
cross-selling opportunities of wealthy clients are highly valued by banks
grappling with higher costs for trading businesses. “Big teams are worth paying
for because they tend to bring everything when they move shops,” said Mark
Elzweig, a New York-based executive search consultant. Bank of America Corp.,
Wells Fargo & Co. and JPMorgan all have said they’re hiring in wealth
management. With European firms pulling back from the U.S. and advisers’
previous retention deals winding down, more teams could be in play next year.
