eFinancialCareers

Rising stock markets, takeover fever as merger-mania continues to heat up – has there ever been a better time to consider a career in corporate finance? Probably not, headhunters would argue.

“Increased deal flow has led to strong growth in corporate finance hiring across all major investment banks this year, as headcount numbers continue to play catch up with pre-downturn levels,” says Olivia Richi-Basurto, manager of recruiter Morgan McKinley’s investment banking and capital markets division.

She says there has also been an increase in opportunities for corporate finance analysts within the private equity and hedge fund arenas.

Jamie-Risso Gill of recruitment firm Robert Walters agrees, arguing that pay rates for corporate finance analysts are currently very good, despite their being at the bottom of the corporate finance feeding chain. So what exactly does a corporate finance analyst do with his or her day? Richi-Basurto says the individual will typically focus on all aspects of analysis relating to mergers, acquisitions, divestitures, leveraged buyouts and restructuring.

“They provide unbiased, meaningful advice on a cross section of companies within their specified sector, originating and executing deals covering all types of products including M&A, equity, equity-linked and debt products,” she says.

Things may be booming in the corporate finance world but that doesn’t mean banks have gone soft on who they select. Headhunters make little bones about the fact that especially for bulge-bracket and first-tier operations, only the brightest and best are considered, with good academic backgrounds seen as a natural filter.

That means individuals with first class degrees from a top 20 university – forget it if you have had the misfortune to have attended a former polytechnic or a little known red-brick institution – ideally with a mathematical background. Strong entrepreneurial initiative, determination and energy are (naturally) expected. Risso-Gill suggests a candidate will also have to be adept at doing star turns at interview as he or she is expected to be client-facing within a relatively short period of time.

Pay me now, pay me later

So if you can fulfil these stringent criteria and find yourself a position in a good house, how much would you be worth? Headhunters suggest analysts usually remain analysts for three years before going on to become associates and over this time see their base and bonus rise.

For first year analysts, Risso-Gill suggests a base of £30,000-£35,000, rising to around £45,000 the following year and maybe £50,000 the next, with bonuses starting around 20% and rising through to 50% (and in a top performing team maybe rather more) of base salary. Richi-Basurto broadly concurs with the base but suggests that at bulge-bracket institutions in particular the bonus can be higher – maybe 70%-120% in a good year. And 2005 has been a very good year.

Is there a downside? Of course there is. Readers of this site hardly need to be told that banks are not charities and like their pound of flesh. For fledgling corporate financiers, this means working your proverbial butt off.

“At some banks, corporate finance analysts will routinely be expected to work 14-16 hour days, sometimes to midnight and quite often weekends as well: it can be a hard slog and clearly is not for everyone,” says Risso-Gill.

But for those who don’t mind the premature grey hair, ruptured relationships or lack of daylight, the rewards are considerable. Base salaries for corporate finance associates start at £60,000, with base and bonus continuing to rise as the individual makes his or her way up the chain. Impressive reward indeed – for those who can take the pace.

Figures and commentary by Morgan McKinley and Robert Walters