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MBA Careers: Banks Seek Dealmakers As M&A Activity Heats Up

A buoyant period of global mergers and acquisitions activity has ramped up demand for business school talent, led by pharma, tech and telecoms.

Wed Apr 1 2015

Banks are bolstering their dealmaking teams. A buoyant period of global mergers and acquisitions activity, with deals struck so far this year at the fastest pace since 2007, has ramped up demand for talent.

Business schools note heightened desire among banks to recruit students for M&A work. Careers managers have told BusinessBecause that hiring for dealmakers in the TMT – technology, media and telecoms – sectors is particularly strong. Healthcare and retail are also in need of M&A bankers, they say.

The value of mergers and acquisitions struck in the first three months of 2015 are up 21% on the same period a year ago, to $811 billion, led by the US.

Paul Schoonenberg, head of MBA careers at Aston Business School, says: “M&A is now on the rise and there is an appetite for junior M&A bankers.”

Dealmaking has been buoyed by a continuation of the favourable market conditions that ignited an M&A revival last year.

In the first quarter of 2015, M&A activity in the US was up 30% – accounting for almost half of all deals globally. In contrast, deal volumes in Europe fell 4%, according to figures from Thomson Reuters.

For budding dealmakers, healthcare is promising. Total healthcare sector value of M&A reached $95 billion, accounting for 12% of all merger and acquisition activity this year, and a 70% increase on 2014.

Activity was led by drugmakers seeking new treatments to offset losses from their patents expiring, with deals from the likes of AbbVie, Pfizer and Valeant completed in the quarter.

There is a rise in hiring for M&A work at entry level but also across the board, according to Tony Somers, director of the Career Management Center at HEC Paris, the French business school.

But he adds: “At the junior level, there was a significant increase in M&A hiring in 2014.”

Telecoms saw strong M&A activity in the first quarter of this year, with Hong Kong’s Hutchison Whampoa snapping up Spain’s Telefónica, while Comcast and AT&T of the US await regulatory approval to complete deals.  

High technology has also been buoyant, with $87.7 billion in deals struck in the first quarter. The market opportunities in big data are expected to push up tech deal activity in 2015, according to a survey this week from KPMG, the professional services firm.

Chad Seiler, technology deal advisory practice leader at KPMG, says: “The ramp up in tech M&A last year will carry into this year, driven by several trends – including the importance of mobile, more advances in data and analytics, the continuing heightened focus on security, and the ongoing attractiveness of the cloud.”

More than 80% of the tech M&A professionals surveyed by KPMG expect their clients to make at least one acquisition in 2015.

Another area where dealmaking activity is expected to pick up is in the energy industry, where the falling oil price has made it difficult for companies to broker big deals.

However private equity groups – which have been luring more business school bankers – have failed to capitalize on this year’s string of deals. Buyout volumes fell 52% to $29.4 billion, the slowest quarter since the beginning of 2009.

The growing role of independent advisory firms in recent deals has been salient. Lazard and Centerview, two of Wall Street’s smaller firms, surged up the M&A league tables after advising on food groups Heinz and Kraft’s $100 billion merger in March.

Christelle Cuenin, global financial services lead at international business school INSEAD, says: “We work with many boutique banks for their recruitment of strong MBA profiles.”

She adds that boutique banks have a more targeted approach. “These firms may prefer to receive applications first, rather than holding a presentation open to all students.”

The top three deal advisors for 2015 are Goldman Sachs, JPMorgan Chase and Morgan Stanley, according to Thomson Reuters’ data.

But there is less demand for MBAs as dealmakers at global banks, according to Adila Khan, Oxford Saïd’s career advisor for finance. She says: “At the entry level we are seeing an increase in activity in the traditional investment banking [and] M&A intake.”

Business schools expect competition to be intense, as investment banks tap more junior recruits who command less pay than MBAs.

Gil Yancey, executive director of the Career Center at George Washington University School of Business, says he is experiencing much greater demand for undergraduates in general.

But he adds: “For graduate students however, demand for master of finance [degrees] is increasing.”