Can canned CDO professionals reinvent themselves? Or is this the end?
Following in the esteemed footsteps of Citigroup, Deutsche Bank, Barclays Capital, Morgan Stanley, JPMorgan and most other banks you'd care to mention, Bank of America is slicing into another 650 jobs across its investment bank, whilst cutting production of CDOs, according to a report in the
FT's Alphaville blog yesterday.
What's an unwanted CDO pro to do? Some areas of the CLO business are still active, but few banks are hiring externally. This being the case, the main option appears to be the buyside.
Most CDO pros are pinning their hopes on being picked up by a fund - one specialist buyside structured credit recruiter (who asked not to be named for fear of death by CV suffocation) described himself as "literally inundated with CVs from investment banking and hedge fund CDO professionals".
He whispers that buyside employers do have roles for both structurers and salespeople, but cautions that they're very choosy: "I might look at a sales CV if someone's been selling into insurance companies or pension funds, where clients are pretty sophisticated, but most [sales CVs] I'll disregard."
Miguel Ramos, managing partner of Washington Square Investment Management, confirms banking CDO pros aren't exactly flavour of the month: "We have trained most of our staff internally as ex-bankers tend to be excessively focused on modeling new issues and negotiating with ratings agencies. We need people with deep fundamental structuring skills that can be used to make investment decisions."
Anyone who wants to get a foot in the buyside door will need to reinvent themselves as a longer term, more client-focused beast, say recruiters. They will also need to convince funds that this is a long-considered career change rather than an opportunistic leap, and be as multi-talented as possible.
"Most funds would like to hire 'sgeeks'," says the fund-specialist recruiter. "They're looking for people who combine the geekiness of a structurer, with the ability to sell structured solutions."
If Bank of America's CDO pros fit this bill, redundancy could be the beginning of something exciting. Otherwise, now may be the time to take a long break somewhere cheap.