Low pay rewards compared with private equity firms and independent advisers are leaving investment banking professionals demoralised, according to consultants at Bohill Partners, a specialist real estate recruitment company.
The company, which has published its latest compensation review for 2015, said media and political pressure to keep bonuses low meant that compensation was lagging behind industry peers at private equity and independent advisory firms.
Those two sectors benefited from strong returns in the real estate market, with bonuses on the increase across every level of experience.
Investment professionals within private equity funds did particularly well in the 2015-16 pay and rewards season. Basic salaries may have remained largely flat on last year but bonuses and elements of fund performance-related pay, or “carry”, have increased.
In addition, moves in the asset management sector among senior figures have prompted a “little bit more parity on asset manager versus investment professional pay”, said Thomas Hughes, a partner at Bohill.
For restructuring professionals this was the “last bumper year”, added Bohill researcher Chris White. As workout processes on bad loans come to an end, he predicts companies will cease to pay the retention bonuses typical of this year and let experts go their own way.
“The specialist investment people, especially in unusual asset classes, have been the biggest winners – that is, people doing student-housing type deals or in more structured operating company-style transactions,” said White.
Those with specialist geographic focus in Europe, in countries including Italy and Spain, are in high demand and are being paid more than the rest of the market. But Hughes added: “If it’s really niche, your candle might burn very brightly but not for very long.”
Hughes said that the market in 2016 would be broadly similar to last year, but added: “It may be a bit better for asset managers, while investment professionals will be slightly less excited about their bonuses.”
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