Growth in corporate strategy

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More and more are leaving M&A for a corporate role, what's changed?

 

In early 2015, recruiting into corporate development roles from investment banks was looking like a particularly tall order. Markets were strong, interesting transactions were frequent, and in a move which was more than a little unexpected, banks not only increased junior bankers’ salaries but held their bonus percentages steady.

Of course, compensation is never the reason to move to a corporate role, but the increasing crevasse between the banks’ and the corporates’ remuneration certainly wasn’t helping things. Candidates were still attracted by the work/life balance, but the opportunity cost of moving proved to be a big hurdle for many. Strategy consultants were up against a less difficult decision.

Transfers to the corporate environment have always been easier to engineer, and the change in compensation levels was (and still is) considerably more palatable, in most cases. If anything, the main objection we’d hear from strategy consultants was that they’d like something more risky; almost the polar opposite of what we’re usually told from those leaving M&A. One year on, what’s changed? Quite a lot, at least on the side of the bankers.

For a start, there’s certainly a tense atmosphere in some of the M&A houses. Grim stories of bankers being marched out in large-scale redundancies have left some feeling rattled, and this perceived drop in security has resulted in increased demand for the calmer waters of corporate teams. Although still high, there’s also been a slight correction of compensation levels and the associated gap has therefore narrowed.

Corporates have remained relatively steady in their remuneration, especially those in the FTSE. In spite of our fears, with the exception of a few wobbles, Brexit has proved to be a relatively minor point for most teams; those companies with their sights set on a long-term growth plan have remained steadfast and committed to their overall strategies. Whilst Brexit has been a frequent topic of conversation, hiring managers we’ve been in contact with have accepted that they can’t affect macroeconomic factors, and have been admirably resistant to being paralysed by fear.

On the strategy side, changes have been more on our side than on the market’s. It’s still a relatively nascent area for us compared to our mature financial services practice, and we’re tackling the learning curve more aggressively this year. We’ve broadened the scope of strategy-related roles which we’ll recruit into, and so far, the results are positive – consultants still hold out for interesting, and potentially risky ventures, and the key seems to be finding opportunities where they can tangibly add value, as opposed to making recommendations from the advisory side which may never come to fruition.

Generally speaking, and without wanting to sound like the archetypal salesman, things are looking busy from our side. This time one year ago, we’d say we were entirely focused on Corporate Development and Group Strategy roles. Take a snapshot of our roles now and they encompass everything from CFO and COO roles, to pricing, propositions and analytics, to the more ‘vanilla’ corporate M&A roles the team cut our teeth on; to support this breadth, we’ve doubled team headcount since this time last year. Long may the growth continue!

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