Investment banking industry struggles to attract talent amid exodus of senior executives

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The once-coveted career in investment banking may be losing its luster in the high-stress post-pandemic world, due to an exodus of experienced professionals from the industry in recent times.

Despite a plethora of initial public offerings (IPOs) and mergers and acquisitions (M&As) over the past year, dozens of investment banking professionals are looking for greener pastures.

Of the 300 mid- and senior-level moves in investment banking in the past 12 months, about 65% have joined other fields, from startups to large corporations, according to data from executive search firm Native.

At the same time, for several large investment banks, talent has become hard to find at all levels.

“It has become difficult to get good talent laterally even though campus hiring has declined,” the head of a national investment bank said on condition of anonymity. “Online banking is no longer the preferred choice for freshmen who now want to work in consulting firms, startups, or become entrepreneurs themselves.”

Analysis of talent movement at some of the world’s largest investment banks over the past two years shows that exits are more than double compared to lateral hires.

Industry insiders blame the rise in outings on an increase in stress levels with deals being struck at an all-time high in the past two years, lack of work-life balance, hours longer and difficult deadlines.

That aside, the lure of better pay packages, hefty ESOPs and fancy job profiles is driving many rainmakers to switch to startups and other corporate jobs, investment bankers said. .

“On the one hand, this is one of the best phases of a decade on transaction dynamics (and) on the other hand, there is the highest ever withdrawal churn from investment banking among the mid-senior talent pool to high-growth companies across strategy, mergers and acquisitions and corporate development,” said Ruchi Thakkar, Head of Capital Markets at Native.

Several bankers said that although it has always been a very stressful job, the last two years of the pandemic have made life more difficult for many in the profession to juggle work and the stresses of life, especially with the booming M&A and IPO market.

“At one time, the sharpest young minds were attracted to online banking because it offered a fast career path with the ability to interact with and advise senior management in addition to being a well-paying job” , said Meetali Jain, who recently joined the used car market Cars24 as head of business development at Bank of America Merrill Lynch. “However, there are now many similar opportunities available in new-era companies and startups as well as large corporations,” she said.

Some of the other recent industry exits include Dhiresh Bansal, who joined Meesho as CFO of JP Morgan, Kunal Swarup, who joined Zomato from Kotak Investment Bank, Shreyance Shah, AVP at Tata Sons who joined Nomura, Gawir Baig, Head of Finance at Anthem Biosciences who left O3 Capital, Sujaya Moghepadhye, SVP Finance at Macleods Pharma who previously led Equity Capital Markets at Edelweiss Financial Services, Skanda Jayaraman who joined as CEO of Qapita Marketplace from Spark Capital, Ashish Mukkirwar, who joined Glenmark Pharmaceuticals as Group VP Strategy from Moelis & Co, and Pranay Shetty, who joined ShareChat as Director and Head of Business Development at BNP Paribas.

ShareChat’s Shetty believes that leaner teams and lower fees in global investment banks have led investment banking teams to “do more with less”, leading to increased stress in the system.

“For me it was the need to explore a new thing and an interesting learning opportunity and although the work is just as hectic there is a feeling of participating in reverse,” he said. declared.

The exodus of talent amid growing business is also driving a wave of urgent hiring at all levels, with demand for mid-to-senior talent rising 15-20%, according to Native.

While some banks are struggling to attract talent, others, like Avendus Capital, have been riding the tech wave and capitalizing on the funding boom in the startup ecosystem.

Avendus has seen a lot of talent gravitate around global and domestic banks. “We have seen an incredible increase in recruitment efforts across all six verticals of our Investment Banking franchise. Most of our hiring is centered around Tier 1 campuses where we continue to have a strong employer brand. We have also proceeded to significant lateral hires last year. While all verticals have seen an increase in demand for talent, this growth has been driven by the digital and technology practice that is growing at the speed of light,” said Anirban Banerjee, human resources director of the Avendus group.

While turnover is also expected to continue in 2022, the war for talent is set to intensify, experts believe.

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