There's a war for talent on Wall Street for a key type of investment banker - and some firms will be left out in the cold

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There's a war for talent on Wall Street for a key type of investment banker - and some firms will be left out in the cold

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Rick Wilking/Reuters

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  • There's a war for talent underway on Wall Street for investment bankers who specialize in consumer mergers and acquisitions.
  • A rash of senior-level consumer investment bankers have been poached by competitors in recent months.
  • Deal activity has been surging in the consumer space, but it's also a specialty on Wall Street in which talent is scarce and difficult to replace, contributing to the competition for top dealmakers.

Wall Street investment banks are duking it out to hire a small cadre of dealmakers who specialize in advising some of the world's most preeminent and visible brands like Coca Cola, Unilever and Nestle.

But in the high-profile consumer mergers-and-acquisitions space, which is experiencing intense levels of activity, there aren't enough rainmakers with tight company relationships to go around, and some banks are going to be left with gaping holes as the talent war unfolds, according to headhunters who specialize in investment banking.

"It's wild, there are probably more consumer searches or needs out there than any other sector right now," said Dan Ryan, a partner at executive-search firm Heidrick & Struggles who leads the company's New York practice.

Earlier this week, Barclays announced it had hired a team of three senior bankers from UBS to join its consumer-retail group. The additions of Brett Pickett, Lowell Strug, and Peter Kuhn will help the bank fill the void created when two of its own consumer-retail bankers were lured away by Evercore this year.

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Adam Taetle left Barclays in January to head up the practice at Evercore, with colleague Wilco Faessen departing just this week to join him.

Goldman Sachs is reportedly in the process of hiring Benjamin Frost, the global co-head of consumer retail investment banking at Morgan Stanley, where he serves as the consumer retail co-head.

Frost could not be reached for comment.

And in the fourth-quarter last year, Citigroup poached Bank of America Merrill Lynch's senior consumer-retail bankers, including David Finkelstein, Carl Stickel, and Jeremy Murphy.

"This is reminiscent of the healthcare musical chairs a couple years ago," said Noah Schwarz, a senior client partner at executive-search firm Korn Ferry. In 2015, with equity markets for biotech and life sciences firms at a fever pitch, demand for healthcare M&A bankers sparked a string of moves.

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The battle for consumer-focused investment bankers comes amid a torrent of dealmaking activity in the sector. It's been a bumper year for M&A overall but consumer companies have been particularly acquisitive, with $234 billion worth of deals conducted so far this year, up 36% from the same period in 2017, according to data from Thomson Reuters.

That includes megadeals like the $18.7 billion Keurig-Dr. Pepper merger, Albertsons' $7.1 billion acquisition of Rite Aid, and General Mills' $8 billion buyout of Buffalo Blue Pet Products.

Triggering a talent war

But unlike the wave of healthcare hires in 2015, or a similar trend in oil & gas a couple years before that, the appetite for consumer retail talent is being fueled by an array of factors beyond the external market conditions.

Chief among them is the scarcity of talent in consumer investment banking, according to Ryan.

Deals in the sector can be sporadic and Wall Street banks typically have smaller teams covering the conglomerates like Kraft, Unilever, and Procter & Gamble that dominate the industry.

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"There's just simply a lack of bankers within in the space," Ryan said. "Generally, somebody has one or two consumer-product bankers and one or two retail bankers."

That's in part a product of consolidation in the consumer space - there are only so many banker relationships a corporate giant needs - and also the broader talent drain Wall Street has suffered the past decade with junior bankers fleeing to opportunities on the sell-side and in Silicon Valley.

One investment banking headhunter, who spoke on the condition of anonymity, put it more bluntly: "There's four good teams and nine banks. There's not enough good consumer relationships going around."

Ryan noted that a lot of the consumer deal activity also happens in the middle-market - smaller deals that big banks have traditionally been less preoccupied with winning.

Add to the mix the rise of boutique and independent advisory firms like Evercore and Centerview Partners that have plundered top talent from the big banks and now routinely win splashy mandates on the largest deals.

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Banks may weather defections on larger coverage teams, but for an already depleted pool of available talent, a couple moves can set of a domino effect.

"You have a lack of talent to begin with, and then all of a sudden you lose senior individuals to the advisory firms, and then a war for that talent starts when two or three trades happen," Ryan said.

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