In one of the darker weeks for finance jobs, Citigroup Inc said it’s planning to increase senior banking hires across key sectors and markets as it aims to become a top-three investment bank.
The lender is seeking to add to its healthcare and technology teams, and is also looking to increase local deal-making clout in some emerging markets, Tyler Dickson and Manolo Falco, co-heads of the bank’s investment banking operation, said in a telephone interview.
“We are focused on quality, not quantity,” Falco said. “There are lots of opportunities for us to expand in China, parts of the Middle East and Latin America, aside from our US expansion. Our focus is on bringing in high-calibre talent who are complementary to our existing business model.”
New York-based Citigroup is ranked fourth among advisers on deals announced so far this year, according to data compiled by Bloomberg.
The firm began a revamp last year, combining the investment bank with the capital markets origination unit in a move meant to align fund-raising and advisory products and give clients more comprehensive coverage.
It hired three executives from troubled German firm Deutsche Bank AG last month, including Mark Keene, who was brought in to become co-head of technology banking.
Citigroup has also employed senior bankers from Goldman Sachs Group and Barclays in recent months to expand in the US.
Deutsche Bank announced a major overhaul this week that will include 18,000 job losses as it combats declining revenue and rising funding costs.
“Advising and financing on mergers and acquisitions, a key source of investment bankers’ fees, is likely to remain volatile because of increasing uncertainty in the global economic and political outlook,” Dickson said.
“We will see increasing volatility in the M&A and financing markets going forward and won’t be surprised to see periods where the deal flow is much less than in the previous years,” he said. “However, our pipeline remains strong.”
Global M&A volumes are down about 10 per cent this year, largely due to a sharp slowdown in Europe, where deal-making has been impacted by a slowing economy and concerns over the UK’s plans to leave the European Union. Activity in the US, traditionally the biggest deals market, is healthier, with spending up about 8 per cent from the same period last year to $1.2 trillion.
Citigroup is also targeting growth in private equity, using its new combined structure to build its business with financial sponsors and alternative asset managers, Falco said.
“Financial sponsors are the highest-growth asset class given they have so much capital to deploy on new investments,” he said. “This is a huge area of focus for us, and we think they are going to be even more active than they are now.”
Buyout firms, sitting on $1.1 trillion of uninvested capital, have deployed billions of dollars in new investments this year, taking advantage of a dip in valuations and renewed focus by companies to shed unwanted assets. Citigroup advised an affiliate of Brookfield Asset Management in its $6.3-billion purchase of Genesee & Wyoming earlier this month.