Over all, head counts at the 12 biggest global investment banks were cut, on average, by about a fifth in 2008, according to data compiled by Oliver Wyman, a consultancy.įinancial services companies have announced more than 400,000 layoffs in the United States in the last two years, including 148,000 in the final quarter of 2008 alone, when the financial crisis hit a zenith, said Mark Zandi, chief economist at Moody’s .įor the chiefs of Citigroup, JPMorgan Chase and other United States banks that have received government money, the implications are worrisome, even though plenty of their workers have stayed put for now. Now that their rivals must accept compensation limits and other restrictions that come with the use of taxpayer support, the foreign banks are finding more eager takers. They see a rare chance to upgrade talent and standing on Wall Street and globally by luring top minds who would not have considered moving from a Goldman Sachs or a Morgan Stanley in flush times. ∺fter 10 years, I did not see a future for myself, said Stephan Jung, who quit his job at UBS to work at Aladdin Capital. Today’s upstarts aim to do the same by hiring away the industry’s talent and, in some cases, trying to replicate the entire investment banking model that was largely dismantled after Lehman Brothers fell last fall. ![]() Altman, a former Lehman banker, created Evercore, another top performer, a decade earlier. In 2006, senior bankers from Goldman and Morgan Stanley formed Perella Weinberg, a top boutique. These kinds of start-ups emerged in earlier cycles, and many remained small and inconspicuous. Moelis has hired 100 bankers, including 17 from UBS, 9 from Bear Stearns, 3 from Morgan Stanley and 3 from Goldman Sachs. One of the most prominent new banks, Moelis & Company, an advisory boutique that has offices in New York, Los Angeles and London, among other centers, was founded in 2007 by Ken Moelis, the former president of investment banking at UBS. “We are attracting people from Merrill, from JPMorgan, from Bear,” he said. Michael O’Hare, who used to run North American equity cash trading and sales at JPMorgan Chase, is building a new sales and trading operation at LaBranche Financial Services, an established firm that is starting a line of business that was traditionally done only within investment banks. “We would never have been able to do this five years ago, but now, it’s as if all of Wall Street got turned upside down, and they shook out all these people.” “We have the opportunity to step into the shoes of a Bear Stearns or a Lehman,” said Lee Fensterstock, the chief executive of Broadpoint, a Manhattan firm that has hired more than 240 people since fall 2007, when the financial crisis started taking root. The New York Times canvassed more than a dozen new boutiques and found that several hundred bankers had been snapped up since the summer of 2007 after layoffs or being lured by smaller firms like Broadpoint, Pinetum Capital and BTIG and bringing their accounts, trading flow and profits with them. Others are leaving because of culture clashes at merging companies, like Bank of America and Merrill Lynch, and still others are simply retiring early. Top bankers have been leaving Goldman Sachs, Morgan Stanley, Citigroup and others in rising numbers to join banks that do not face tighter regulation, including foreign banks, or start-up companies eager to build themselves into tomorrow’s financial powerhouses. ![]() They are some of the same banks blamed for setting off the worst downturn since the Depression. ![]() As Washington cracks down on compensation and tightens regulation of banks, a brain drain is occurring at some of the biggest ones. There is an air of exodus on Wall Street and not just among those being fired. Jung, 42, who quit to parlay his sales expertise into a career at Aladdin Capital, a small but rising investment firm run by others who had also left some of the most venerable names in finance. “After 10 years, I did not see a future for myself,” said Mr. Jung realized that the old Wall Street would not be bouncing back any time soon. A veteran of UBS, one of many banks tarnished by the financial crisis, Mr. The turning point for Stephan Jung came in February, around the time bonus checks were slashed.
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