Wall Street snaps up credit risk experts
NEW YORK, July 27 (Reuters) - It's a good time to be a credit risk specialist on Wall Street, but if you sell collateralized-debt obligations your year-end bonus could be you just get to keep your job.
The U.S. credit market is in turmoil amid escalating defaults on risky subprime mortgages and a growing distaste for the high-yield debt that has fueled a global merger and acquisition boom.
That's good news for people who specialize in assessing credit risk and can restructure troubled portfolios of securities tied to subprime mortgages, or loans to people with weak credit. But it is not so good for people who sell structured credit products, such as CDOs backed by pools of subprime mortgages or bank loans.
"There's probably going to be a lot of transition at the end of the year," said John Carter, a Wall Street recruiter at New York's Hagan-Ricci Group Inc. "I think it could get bloody."
Over the past two months, in what is usually a summer lull for hiring by investment banks, there's been an upswing in demand for credit risk analysts and risk officers.
"We had a surge in employment in June and July after just some OK months," said Brian Drum, president of recruiting firm Drum Associates.
But big Wall Street investment banks have been slow to fill jobs in structured products sales, for example, a job that can pay senior level people anywhere from $500,000 to $2.5 million.
"Things are quiet, as they usually are in the summer," Carter said. "But it's even quieter than usual because of the subprime explosion. Hiring I've been seeing has been concentrated in lower ranks."
But structured credit products are not going away. Portfolios of these assets still need to be managed.
Carter and Drum said ultimately institutional investors who own these assets will look to Wall Street to get the talent they need to manage their portfolios.
"The people who have the skill level of knowing how these credit products work are going to be in need," Drum said.
