High yield analysts: banks, hedge funds square up

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As the high yield market heats up, it seems there aren't enough sub-investment grade analysts to go around.

Katie Penrose, director of the capital markets division at Akamai Financial Markets, says banks are having to look outside their usual stomping grounds. "Organisations are trying to hire from the US, where the market is more developed," she told us. "Banks are also looking to convert equity and investment grade analysts into high yield analysts."

Experienced high yield analysts are increasingly able to name their price. Penrose says experienced analysts can command 20% more than an investment grade analyst's 160k to 220k a year package.

Global high yield debt issuance is at an all time high. So far this year it totals US$217.4bn (114bn) according to data provider Dealogic, up 3% on the previous record set in 2004.

Banks, hedge funds and long only managers are also doing battle over structured credit analysts. The market for investment grade expertise is sadly moribund by comparison.

Steve Yendell, managing consultant at recruiter Selby Jennings, says structured credit analysts with five years' experience can command a basic of 100k and a 100%, guaranteed bonus.

The problem may yet by resolved by an increase in supply. Chris Sevenoaks, a consultant at recruiter Finance Professionals, says some asset management firms are balking at the price of seasoned credit analysis talent. They're retraining people from the Big Four accountancy firms instead.

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