Leveraged finance bankers are getting excited: "People will need to be promoted very hard"

If you're looking for a parable about the cyclical ups and downs of banking careers, then leveraged finance bankers might be a good place to start. 

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After some horrible years, leveraged finance bankers are feeling good again. The total volume of leveraged finance deals in Europe more than doubled to €204bn between January and August. Globally, BCG says healthcare leveraged finance activity in particular is up 77%. 

The new tempo was evident in last week's EMEA leveraged finance conferences at Goldman Sachs and JPMorgan. Goldman had niche TV "documentarian" Louis Theroux in to enervate its "buzzing guests." Jamie Dimon and JPMorgan's global head of capital markets, Kevin Foley, flew in for the occasion. Foley declared the energy "captivating" and said the uptick in financing activity has been "significant:" volumes have more than doubled for both leveraged loans and high yield bonds; the forward pipeline of underwritten deals is at a two-year-high. 

None of this has escaped the attention of Europe's finance leveraged finance bankers, who are equally captivated by the benefits for their own careers. "People will need to be internally promoted very hard this year," says one London-based director. "There will be a lot of poaching next year, so whoever is up for promotion will need to be promoted."

There has already been some poaching this year. MUFG revealed yesterday, for example, that it's hired Simon Steffen from Santander as head of EMEA leveraged finance capital markets. In the US, Barclays has been hit hard by exits. CIBC hired Brad Aston from Barclays in May, Mizuho hired George Lee from Barclays and Corey LoVerme (also previously from Barclays) in August, and Citi hired four for its leveraged loans desk (two from Barclays in July).  Wells Fargo also hired Alexandra Barth from Deutsche Bank in July, and SMBC made four hires in February.

Leveraged financiers who don't feel looked after by banks have options. Private credit providers want them too. As the charts below, from Boston Consulting Group, show, private credit markets have come to dominate broadly syndicated loans (BSLs) in terms of both LBO and non LBO financing. Even as BSLs have recovered in 2024, private credit still dominates the space in a way that simply wasn't the case before the pandemic. 

Source: BCG

Accordingly, many of the moves in leveraged finance this year have involved private credit providers. In July, Apollo hired Murad Khaled, the EMEA head of leveraged finance at Bank of America, while Luke Gillam, Goldman's head of EMEA credit finance capital markets, went to Albacore Capital as head of senior private credit. In August, Tomasz Gruszka, one of Bank of America's top structurers in London, left for Redding Ridge Asset Management.

The implication is clear: if leveraged finance professionals in banks don't feel valued this year, they might go on their way. At the same time, banks are back in the game. "The banks are coming back and getting their slice of the pie.  However, it’s much more competitive and the new players are making for a very competitive market!," says Michael Nelson, head of global markets in the US for search firm Sheffield Haworth.

However, even the most ebullient lev fin professionals acknowledge that some who disappeared during the dark years are excluded from the party. "People were let go during the pandemic," says one. "Most of them still don't have new jobs yet."

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