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European M&A: End of year report and salary review

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In comparison to 2015, which saw M&A hit levels
not seen since 2007, 2016 was a much more
challenging year for M&A. The UK referendum
caused huge amounts of uncertainty in the first
half of the year as dealmakers targeting the UK
were reluctant to come to market. This led to a
slow-down in M&A activity in the first half of the
year with 3,110 deals worth US $342.8bn; both
the lowest H1 value since 2013. The vote itself
caused shockwaves in the market, reducing activity
further as many dealmakers looked to postpone
or cancel proposed deals in order to wait for some
of the immediate turmoil to settle down. Moving
into the last part of the year however, deal activity
has rebounded as with the decision now known,
dealmakers looked to make up for lost time.

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European M&A: End of year report and salary review

  1. 1. INDUSTRY INSIGHT EUROPEAN M&A: END OFYEAR REPORT & SALARY SURVEY 2017
  2. 2. In comparison to 2015, which saw M&A hit levels not seen since 2007, 2016 was a much more challenging year for M&A. The UK referendum caused huge amounts of uncertainty in the first half of the year as dealmakers targeting the UK were reluctant to come to market. This led to a slow-down in M&A activity in the first half of the year with 3,110 deals worth US $342.8bn; both the lowest H1 value since 2013. The vote itself caused shockwaves in the market, reducing activity further as many dealmakers looked to postpone or cancel proposed deals in order to wait for some of the immediate turmoil to settle down. Moving into the last part of the year however, deal activity has rebounded as with the decision now known, dealmakers looked to make up for lost time. The German market on the other hand saw an increased level of activity in 2016 following a drop in 2015 as buyers, particularly Chinese, looked to acquire good quality German assets. Dealmakers focussed particularly on picking up industrial technologies which led to the Industrials and Chemicals sector having the largest share of any sector in the German market. Cross border activity was up in Germany as well, as German investors looked to invest large sums into US assets with the $66bn potential acquisition of Monsanto by Bayer being the largest outbound acquisition by a German Company on record. INTRODUCTION
  3. 3. Industry Insight | Enabling Exceptional Careers Analyst - Associate As with deals, the level of hiring has been down in 2016, however, there has been a continued demand to hire Analysts and Associates as there is still a shortage of candidates at this level. The Associate level has been of particular interest due to lack of hiring in the years following the financial crash and the usual loss of candidates to the buy- side has led to a number of different banks and boutiques aggressively hiring at this level. Associates from larger banks have been making the shift to boutiques this year in order to move to a more lean structure where they will gain increased exposure to deals and more responsibility. Candidates from the Big 4 Accountancy firms have been the other big movers in 2016 and have been in high demand from both banks and boutiques. These candidates, from lead advisory teams and transaction services teams, are well trained, have good technical skills and are keen to move onto institutions that are more specialised in Investment Banking to further their careers. To entice and retain staff in the current climate, base salaries for junior candidates have continued to rise. VP - MD Hiring at theVP and Director Level meanwhile, has been more sporadic as only newer MA teams have looked to hire more experienced staff to lead execution and assist with origination. Due to ‘juniorisation’and also being well staffed at this level, established banks have shied away from hiring at this level unless either looking rebuild underperforming teams or establishing altogether new teams. The MD / Partner level has still attracted a strong level of interest, especially at the boutiques as strong originators are welcomed in order to increase deal flow. Furthermore we have seen a number of different boutiques look to diversify and branch out into different sectors, such as Stephens building out a FIG team. HIRING TRENDS - SENIORITY LEVEL
  4. 4. HIRING TRENDS - MARKET TRENDS As with last year,TMT has been one of the busiest sectors and as result has been one that has seen the most growth. SpecialistTMT boutiques such as GP Bullhound, ARMA Partners, Mooreland Partners and NOR Capital have all looked to add to their established teams in London, primarily targeting Associates. Despite the Brexit vote, other European and US boutiques have looked to build out offices in London – the US boutique AGC Partners has opened an office in London by hiring Markus Salolainen from Growth Point Partners.The French boutique Clipperton has opened an office and is in the process of growing while another French boutique, Bryan Garnier, has looked to establish a TMT team as well. A number of firms have expanded inTMT in Europe as well with GP Bullhound establishing an office in Pairs, Clipperton adding a VP in Germany and AXCIT Partners recently hiring Mathis Wilke as an Executive Director from IKB to further bolster its TMT business. Healthcare and Consumer teams have also been busy this year with a number of different teams hiring. Rothschild has been a big hirer in Healthcare this year while Oppenheimer has established a Consumer team, hiring Daniel Krsicka from Houlihan Lokey as an Executive Director. Industrials has seen growth with Evercore building out its team further, the Valence group adding in Chemicals. Infrastructure, Power, Renewables and FIG teams have also seen small levels of hiring, however, Natural Resources has had another difficult year with a number of banks, including Nomura and Societe Generale, letting go entire teams. Despite this hiring, the larger Investment Banks have been cutting large portions of their MA teams, with Nomura letting go large numbers in TMT, FIG and Consumer, Morgan Stanley in Real Estate, Credit Suisse in Industrials and Consumer and RBC across their entire IBD business. Even though Associates have been the most desired hires of 2016, conversely the cuts we have seen have primarily been at this level as banks look to upgrade their current teams. As we approach bonus season it is likely to be a tale of two halves.Top US banks (GS,MS,JPM) have had a strong year in 2016, particularly post Brexit, and have seen a sharp uptick in deal flow in comparison to the year prior. This has led to much higher optimism of bonus levels in comparison to last year. On the contrary employees at European banks are generally less positive about their expected figures as a number are recovering from large fines whilst other banks are still challenging to compete with the US players.
  5. 5. SALARY REVIEW
  6. 6. www.selbyjennings.com | enquiries@selbyjennings.com Industry Insight | Enabling Exceptional Careers £0 £10,000 £20,000 £30,000 £40,000 £50,000 £60,000 £70,000 US/Top European Banks Tier 2 Banks Boutiques Analyst 1 Average Salary Analyst 1 Average Bonus Analyst 2 Average Salary Analyst 2 Average Bonus Analyst 3 Average Salary Analyst 3 Average Bonus ANALYSTS Title US/Top European Banks Tier 2 Banks Boutiques Salary Range (£) Bonus (%) Mean Total Comp Salary Range (£) Bonus (%) Mean Total Comp Salary Range (£) Bonus (%) Mean Total Comp Analyst 1 £50,000 - £55,000 20% - 70% £76,500 £45,000 - £50,000 20% - 50% £62,500 £35,000 - £50,000 20% - 50% £57,000 Analyst 2 £55,000 - £60,000 40% - 80% £93,500 £50,000 - £55,000 30% - 60% £77,000 £45,000 - £55,000 30% - 60% £72,500 Analyst 3 £60,000 - £65,000 60% - 100% £112,500 £55,000 - £60,000 40% - 70% £97,500 £50,000 - £60,000 30% - 85% £91,000
  7. 7. www.selbyjennings.com | enquiries@selbyjennings.com Industry Insight | Enabling Exceptional Careers Banks £0 £20,000 £40,000 £60,000 £80,000 £100,000 £120,000 US/Top European Banks Tier 2 Banks Boutiques Associate 0* Average Salary Associate 0* Average Bonus Associate 1 Average Salary Associate 1 Average Bonus Associate 2 Average Salary Associate 2 Average Bonus Associate 3 Average Salary Associate 3 Average Bonus Associate 4** Average Salary Associate 4** Average Bonus ASSOCIATES Title US/Top European Banks Tier 2 Banks Boutiques Salary Range (£) Bonus (%) Mean Total Comp Salary Range (£) Bonus (%) Mean Total Comp Salary Range (£) Bonus (%) Mean Total Comp Associate 0* £75,000 - £80,000 Stub bonus £97,500 £65,000 - £75,000 Stub bonus £84,500 N/A Associate 1 £80,000 - £90,000 30% - 90% £145,000 £65,000 - £90,000 30% - 70% £122,500 £60,000 - £90,000 40% - 110% £130,000 Associate 2 £100,000 - £110,000 40% - 100% £182,000 £80,000 - £105,000 30% - 80% £159,500 £70,000 - £95,000 50% - 120% £152,500 Associate 3 £110,000 - £120,000 40% - 100% £200,000 £90,000 - £110,000 30% - 100% £175,000 £80,000 - £105,000 50% - 120% £172,500 Associate 4** N/A £100,000 - £110,000 30% - 100% £190,000 £90,000 - £115,000 50% - 120% £192,500 *Associate 0 is not at all banks. **Associate 4 not at all banks
  8. 8. www.selbyjennings.com | enquiries@selbyjennings.com Industry Insight | Enabling Exceptional Careers £0 £20,000 £40,000 £60,000 £80,000 £120,000 £140,000 £160,000 £180,000 US/Top European Banks Tier 2 Banks Boutiques Vice President 1 Average Salary Vice President 1 Average Bonus Vice President 2 Average Salary£100,000 Vice President 2 Average Bonus Vice President 3 Average Salary Vice President 3 Average Bonus VICE PRESIDENTS Title US/Top European Banks Tier 2 Banks Boutiques Salary Range (£) Bonus (%) Mean Total Comp Salary Range (£) Bonus (%) Mean Total Comp Salary Range (£) Bonus (%) Mean Total Comp Vice President 1 £130,000 - £150,000 60% - 110% £255,000 £110,000 - £130,000 50% - 100% £220,000 £85,000 - £110,000 50% - 150% £195,000 Vice President 2 £140,000 - £155,000 70% - 110% £277,500 £115,000 - £145,000 60% - 100% £245,000 £95,000 - £125,000 60% - 150% £220,000 Vice President 3 £145,000 - £170,000 70% - 130% £307,500 £125,000 - £155,000 60% - 110% £265,000 £105,000 - £140,000 80% - 150%+ £247,500
  9. 9. 2017 will be an interesting year for European, and more specifically UK MA that will be impacted a lot by political activity.An active MA market is very much linked to confidence so the way in which the UK handle the exit from Europe will have a direct impact on deal flow.Whilst this creates uncertainty it does also create opportunity as a number of UK companies remain attractive for purchase,especially from international buyers given the exchange rates. Over the last few months a number of clients have said they expect cross border MA in to Europe to increase across 2017, andTMT and IP to be high on a lot of people’s targets. This is demonstrated with the following deals happening in the TMT sector, such as; Microsoft LinkedIn, the Verizon takeover ofYahoo, and 21st Century Fox acquiring the remaining stack in Sky. Market optimism has increased considerably since the initial pessimism following the Brexit vote. Clients still remain cautious of where the opportunities will arise in 2017 and many expect it to be a challenging year, but we continue to see appetite to hire and are confident this will remain. Please note that the above salary surveys cover a significant proportion of the market, within vastly different companies; taking into account different levels of seniority. If you would like to learn more about what you should be earning or paying, specific to your individual circumstances, please do get in touch. Our Consultants will be happy to help: ibdcb@selbyjennings.com. SELBY JENNINGS
  10. 10. This guide has been brought to you by Selby Jennings, part of the Phaidon International. Selby Jennings is a specialist provider of Financial Services recruitment solutions across Europe, the US, Asia and the Middle East. We believe every professional should benefit from the advice of a trusted partner throughout their career. Contact Selby Jennings for more information about career opportunities in this sector, or if you are looking to expand your team. Contact us today: www.selbyjennings.com enquiries@selbyjennings.com Enabling Exceptional Careers Selby Jennings exists to enable exceptional career around the world; we connect exceptional talent with exceptional opportunities. INDUSTRY INSIGHT

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