Forget independent buyout houses - banks' own private equity funds look set to be the bigger recruiters for the rest of this year.
Morgan Stanley has chosen this moment to establish a 2.9bn global buyout fund. Having hired Graham Keniston-Cooper, formerly of Cinven, and shifted its head of UK investment banking across to help run the business, The Financial Times reported earlier this month that it's looking for another two executives - plus, we suspect, several juniors.
Morgan Stanley isn't the only bank going for full body immersion in the tempestuous waters of European buyouts. Financial News reports that Citi has now hired three bankers to lead its European buyout team and plans to hire several more.
Is now the right to be taking the plunge? Despite allusions to "more challenging" conditions by Blackstone and warnings of a "dramatic drop in returns" by Jon Moulton of Alchemy Partners, banks seem to think so. Jonathan Rowland, head of Citi's private equity effort told Financial News the current problems are just a "bit of indigestion."
With likes of KKR and Carlyle both looking to raise multi-billion-euro funds in the near future, recruiters say independent funds are also taking a long term approach.
"The private equity sector is hiring," says Jackie Turcu at recruitment firm Astbury Marsden. "It's just as buoyant as last year, with many funds looking to add juniors now that banking bonuses have been paid."
Junior bankers, on the other hand, are more circumspect about going into private equity: "A month ago, I'd have said there was no change, but driven by what's happening to leveraged finance and the credit markets, people are now carrying out more in-depth due diligence before they commit," says Turcu.
Recruiters say funds attached to banks are likely to pay better than their independent rivals in the short term. An analyst in an independent fund can expect to earn a 45k to 55k salary in the first year, plus a bonus of 30% to 50%. But his or her counterpart can expect to be paid on a par with M&A analysts, who've earned total compensation of up to 140k this year.