Australian equity capital markets activity is increasing, but the employment market for ECM bankers hasn’t quite caught up. Foreign i-banks still prefer redeployment to recruitment, leaving local and boutiques firms to carry out small-scale hiring.

Australian companies have raised US$21bn in equity so far this year, making it the world’s third-biggest equity capital market behind the US on US$83.6bn and the UK on US$35.7bn, according to research firm Dealogic.

Is this making the global banks take on more ECM employees? “We’re not seeing massive headcount growth. Most of the i-banks still have headcount freezes on,” says Angus Price, a partner at Derwent Executive.

Barry Harte, director, Pentire Associates Australia, agrees that foreign firms are finding it hard to recruit in ECM. “The European and US names, while dominant in some sectors, struggle to add headcount while their firms’ global redundancies are still such a clear memory.”

There is still demand for ECM origination skills, according to Harte. “But it actually leading to hiring is another matter because the sky-is-falling-in point of view hasn’t disappeared entirely, so many firms just aren’t in recruiting mode,” he adds.

For now, the increased ECM activity means that foreign i-banks are redeploying staff from other departments, such as M&A and DCM, says Price.

“If the market was firing on all cylinders, then they would probably look externally, but currently they have capable people elsewhere in the business who aren’t at capacity. This is a way of retaining them and avoiding redundancies,” he adds.

The Big Four banks and the smaller local brokerages are doing most of the recruitment and candidates are becoming more open to these opportunities, comments Price. For example, CBA recently hired Jay MacGregor from Citigroup to head up its ECM unit.

Gary Howard, an investment banking consultant at Talent2, says the emerging international importance of Australia as an ECM market could soon cause i-banks to rethink their current hiring strategies.

Who are they likely to hire? “Relationship bankers with proven track records in Australia and strong origination skills, including solid execution capability, who can provide confidence to clients looking for trusted advisors,” explains Howard.

“There are only a few long-standing ECM bankers in the Australian market with the right mix and credentials, unlike the deeper talent pool in Europe, Asia or the US,” he adds.