Dealmakers are in high demand across Wall Street.
And boutique banks are no exception. They’ve been busy making big-name senior hires while also looking to hang on to and develop junior talent.
Firms such as SVB Leerink and Evercore have hired groups of bankers from top firms such as UBS and Citi, while other boutiques, such as Moelis and Jefferies, have led the market with pay raises, bonuses, and perks to retain junior bankers.
Many boutique banks also boast of providing higher base-pay and compensation guarantees, welcoming more flexibility when it comes to remote work, and desiring to train junior bankers and promote from within.
During second-quarter earnings calls in recent days, four boutique-bank CEOs — at Moelis, Evercore, PJT Partners, and Lazard — discussed the dealmaker talent wars and how they’re staying competitive.
While Moelis is recruiting externally for managing directors — the firm has recently added 11, executives on the July 21 earnings call said — the bank is also working to ensure that it has enough talent from within to take over as the next generation of senior bankers.
"We believe our internal talent pool is phenomenal," said Ken Moelis, the bank’s chairman and CEO. "We are hiring externally, but the fundamental power of the platform is that they’re coming up."
He noted on that while there’s a war for talent at the MD level, what’s even more striking right now is that it’s also happening "throughout the pyramid" of seniority.
"It’s up and down the whole structure of everybody’s company," he said.
Moelis said the firm is focused on hiring people at the junior level and then spending a lot of money to train them for a future at the firm. Recently promoted bankers are sent to multiple days of executive coaching with the Moelis Advance Access Program at Wharton, where board directors and senior executives work with them and help them improve their presentation skills.
The outcome is that bankers who are on the younger side are already handling business on their own, Moelis said.
"A lot of the revenues right now are being generated by some of those pre-managing directors and executive directors who are already becoming productive," he said. "So I’m very excited about our ability to grow managing-director head count by double digits, and I’m hoping that’s internal promotions plus a few externals."
"I’m very excited about what we have going on inside the firm," he said.
Paul Taubman, PJT’s founding partner, chairman, and CEO, has noticed that more people have been willing to explore big career decisions as the pandemic fades. That’s helped PJT grow its strategic advisory headcount by 20% in the last year, mainly with vice presidents up through senior hires.
"When you’re really in the midst of a crisis, most people want to sail close to shore, and they end up staying at their incumbent firm," he said on a July 29 earnings call. "And I think individuals are starting to say, okay, let me return to these important career decisions."
Taubman added that the firm received 8,500 campus applicants for summer 2021, and that PJT was one of the few to hold an in-person summer internship program. Staying engaged with recruits and focusing on delivering a good experience is giving the firm a leg up in the recruiting wars, he said.
"We’ve built an extraordinarily differentiated culture, and you can’t recreate that with a Peloton bike," he said. "So I feel like we’re in a really good place, and we’re going to continue to make sure that all of our employees get all of the career development, all of the mentoring…if we can continue to do that and we can continue to polish a world-class culture that at the end of the day is going to be the single biggest recruiting advantage that we have."
Kenneth Jacobs, Lazard’s chairman and CEO, said it’s a "tough environment both in terms of getting talent and retaining talent," and that the firm’s hiring strategy is to grow in a few specific areas where the bank has identified weaknesses and opportunities to grow.
"Obviously, the sectors where we’re going to see accelerated growth — biopharma, technology, the shift to a carbon-free world, how you play the renewables" — are all areas where the firm sees opportunities, he said on the July 30 earnings call.
Lazard is also looking to beef up teams that work with financial sponsors, alternative capital, and business services, he said.
Jacobs added that Lazard has made more than a dozen senior hires so far this year, many of whom haven’t been announced, and that although a competitive talent market may translate to higher expenses down the road, there are still more opportunities.
"We’re finding that our platform is actually quite attractive right now. We see a lot of opportunity to expand right now, and we’re not having that much difficulty attracting talent," he said. "Now, that could change. But for the moment, it’s pretty good in that regard."
Evercore normally hires four to eight advisory senior managing directors each year, but leadership said during the July 28 earnings call that this year they expected to be at the high end of that range — or perhaps exceed it.
"As we move into the second half of the year, we remain focused on adding talented individuals to our firm as we seek continued growth," said John Weinberg, a cochairman of the board of directors and co-CEO.
"We’re actively recruiting highly talented individuals to our team, and we continue to have many conversations with senior-level candidates in the capabilities, sectors, and geographies that can contribute to our growth objective."
Weinberg added that two senior advisory directors have joined the firm so far this year, and three more advisory senior managing directors have committed to joining the firm in the next few months. These hires are in the healthcare, fintech, and financial-sponsors-coverage sectors, he said.
"We do have some very strong people who have agreed to come, and we think that we are in several dialogues, and we’ll see where those play out," he said.
Samantha Stokes July 31, 2021 at 03:39PM