SPEAKER_00 0:03

The OneSearch Podcast. Insights and opinions on the subjects that matter. In global infrastructure, financing and investment. With the OneSearch Credit Practice.

SPEAKER_04 0:20

Okay, so we think this is the fifth podcast, or at least I do. Honestly, lost track. We've just been having so much fun podcasting. Uh we don't know, but we think it's the fifth. We're recording it on Wednesday, the 24th of March. We're continuing this review of the compensation situation across infrastructure credit. One of the directions of travel for candidates in our uh community is out of banks and infradebt funds into the commercial world, into the uh the world that we would call the world of sponsors and corporates, the world of strategic platforms where they will take their project finance skill set, or perhaps it's a combination of MA, project finance that they've developed within the banks and take that into that uh that corporate setting. So the question is, what does that mean in the context of uh compensation? Uh are those people making a move, Namisha, to uh to get a pay rise?

SPEAKER_02 1:27

No, I don't think so, is is my opinion on that. I don't think base salaries necessarily differ too much, but I don't see people going to sponsor corporates and developers for the money. Um I think they're probably at like that mid to low range of the salary brackets we talked around, sort of the the 120 to 150, 160k mark. I don't see many individuals. For a director, right? Yeah, sorry, this that this is for director level. I don't see many kind of reaching the top end of where you could get in in a bank or a fund um in terms of comp um base salary-wise. And I think bonus-wise as well, it is lower than what banks and funds pay. Um, I think you're looking at that low end at the director level of around sort of the 40-50% mark is is probably an average with these types of institutions. So I think the reason they make those moves is the conception of sort of work-life balance, firstly. And secondly, I think a lot of them to get away from banking and sort of the hierarchy and regulation that comes with banking that we were discussing last week. When you get to that senior level in banking, it almost takes you away of doing what you love, which is the deals. Um, so I think going to these types of institutions that are not like this huge banking sort of culture and structure um very much puts them back into what doing what they love.

SPEAKER_04 2:55

I think that's right. We we had a call, didn't we, G, yesterday, where you know you were presenting some candidates to a client, and and one of those was exactly that scenario, someone who probably is ready to take a uh a little bit of a hit on comp who maybe is uh it wants to get away from the uh you know the nature of advisory work, of banking work, where they're just coming into coming in and out of situations. They want to they want like a longer term uh to feel like a part of a commercial business, right, G?

SPEAKER_03 3:30

Yeah, I mean the way that this candidate had phrased it is almost perfect, right? I mean, he wants to have an impact on uh on these companies that he's working with, and it's hard to see what is it, the fruit of your loins? Is that how you would say it? Like your heart.

SPEAKER_04 3:43

No, the the fruit of your loins would be the uh would be your offspring, G. So when yeah, my three children are the fruit of my loins. So I don't have any fruit. Hopefully, that's not what your candidate was talking about. But I maybe they maybe they mean maybe they're gonna reap the the the the fruit, the harvest of their you know their hard work, sowing the seeds, not in a sexual way, in a in a professional way.

SPEAKER_03 4:06

No, I don't think that's what he tried to say either. It's not even reaping the benefits.

SPEAKER_04 4:10

Okay.

SPEAKER_03 4:10

I think he just wants to see his hard work have an in a positive impact on the companies that he that he works with.

SPEAKER_04 4:17

Yeah, and he wants to be around for the he wants to be around when that hard work pays off, right? I mean, the you come in as a banker on a on a on a particular project, piece of work, you might do some spectacular great work for that client, but by the time it it pays off, comes to fruition, you know, a couple of years down the track, you've you've you've long since moved on.

SPEAKER_03 4:38

Right.

SPEAKER_04 4:39

So that's what that's what we're seeing as so motivators, there are maybe the pull factors of going and being part of an industry that you that you're genuinely interested in. That's that's what we're hearing from candidates, or is it more people that just hate banking? It could be both. Bit of both.

SPEAKER_01 4:57

I think a bit of both. Depends on who you speak to. Yeah, it could be a bit of both, but then at a certain level, I mean, speaking to um VPs when um, you know, they're they're they can be working hard at these um corporate, uh, corporate sponsors and strategics, and and a lot of them told me that they can be working as hard as bankers. So um, let's say I at VP level where I have been speaking to them recently, um, they could be like, Look, I'm I'm starting a family, I'm buying a house or buying a bigger house, so the money does make a difference, and I'm working just as hard, so I might as well just move to a bank or or try to move to a fund. So um it's not necessarily that they that they're work they have better work-life balance. So a lot of them just move to back to banking um for for financial reasons.

SPEAKER_04 5:52

I think we've discussed earlier in this series people who've left banking and gone to work for a debt fund, and I think we all agreed we don't really get anyone. I mean, I genuinely can't remember a single person who said, I want to go back to banking.

SPEAKER_03 6:08

I can name one. Go on, I won't name it though.

SPEAKER_04 6:12

I bet they didn't work for HSBC.

SPEAKER_03 6:16

No.

SPEAKER_04 6:18

Okay, well, look, we can so the fact that we can only think of one between us probably uh tells it tells a story, but uh probably it's it's uh yeah, it probably says more about the debt funding question than than than the desirability of a return to banking. But what Mercedes is saying, and I think there's a lot of truth in this, is that it's not always the same with uh with sponsors and corporates and strategics. And I think the reason is that they've taken the pay hit and yet still find themselves perhaps working just as hard as they were in the bank.

SPEAKER_02 6:51

Yeah, I think it's probably dependent on the specific institution, right? I think there probably are institutions out there that very much live up to what people think the conception of move making that move is, which is a better work-life balance and a bit more of a relaxed lifestyle, let's say, um, because you you tend to see that move. You do see it at junior at the junior level as well, but you see it quite actively at the senior level as well, where they've been in banking for quite a substantial amount of time, um, and then they sort of almost want to want to see out their career or not even see out for the next 10 years at least, end up in in a sponsor or corporate so they can have have a bit of a life um to finish their career off. So I think it's very dependent on the particular institution in question, I would say.

SPEAKER_04 7:40

Yeah, yeah, I was gonna say, Namisha, you almost make these uh yeah, these fine uh corporate institutions feel like sort of semi-retirement hubs. Is that is you know, is there some is there some truth to that though?

SPEAKER_02 7:51

No, I I think I was uh that that maybe came across wrong.

SPEAKER_04 7:56

But on the serious now, are they places where you know a banker who's had 20 gruelling years at the at the you know the sharp end goes to, you know, not to die, but to just to sort of relax a little bit, to uh maybe to bring all the skills they've learned in the banks into a more commercial setting, but but technically to take their foot off the gas a little bit.

SPEAKER_02 8:17

Yeah, I mean that's what I've seen. Um obviously uh the GM Mercedes may may have seen sort of different scenarios, but that's what I've seen at sort of even associates, right, that have had their first three, four years into the financial world in a bank where they're doing advisory and they're like, okay, I don't think I can see the rest of my career being this this intense. So making that transition on early, earlier, um, because ultimately the the conception is that that you would have a better work-life balance. So I think that is if you look at most sponsors and corporates, where have they come from, it's it's the banking world.

SPEAKER_04 8:54

Absolutely right. And by the way, look just to get back to the numbers, I think those, I think that sort of bonus range that you talked about for director level people is applicable, but I think it's at the higher end of the range, actually, 40 or 50 percent, in my view. Yeah, tell us more, Mark.

SPEAKER_01 9:11

Oh, um I uh it's just because I'm working with one at the moment, uh, and uh their bonus is at 12 and a half. And so yeah, I think uh and then I'm working with another one at the moment where their bonus is up to 50%. So so I would say that yeah, it's at the higher end.

SPEAKER_04 9:29

Yeah, I think look, yeah, 12 and a half is is low. I've seen uh numerous businesses that are actually one would think pretty respectable brand names and certainly hugely profitable organizations that would cap the bonuses at 20%. So it would even say in the contract up to 20% bonus, and you've got guys coming into these jobs, or at least they're trying to hire people into these jobs that have been used to getting in the high tens or 100% bonuses previously. So there's a there's a I think in some cases, and again, there's a huge disparity uh depending you know from one firm to the next, unlike the banks, which are very, very standardized, it's very easy to kind of commoditize a banking job, and for us guys to to assign to easily kind of assign compensation uh to a to a C V, essentially, isn't it? If we're shown a C V of a banker, we can very easily say, okay, I bet this person's earning plus or minus 10% of X. I think it's much harder for us to do that with people on the uh on the corporate side, right?

SPEAKER_02 10:42

Yeah, definitely. I think um, yeah, I think you're right. I think probably 40-50% mark is probably at the upper end. But would you agree, I guess, across the board that base salaries are probably mid to low range? Did does everyone sort of agree on that?

SPEAKER_04 10:58

I do.

SPEAKER_03 10:59

We've seen we Dan, we worked on similar search not too long ago, director hire uh was what 200k base, 300 all in.

SPEAKER_04 11:09

Exactly right, yeah. So uh that's dollars G's referring to in on the East Coast on a strategic platform, which you know, you look at that at the individual that that uh that we placed, and it was a um, yeah, I think low to low to mid-range base, someone that could be earning anywhere in that sort of 200 to maybe 300 base bracket. And I think the base came in at 225, and all income was targeted at something like 325. So in the world of the strategics, I thought it was pretty standard. But if you compare it to a bank or a debt fund for an established director-level candidate, it was it's certainly low.

SPEAKER_03 11:52

Yep, I would agree.

SPEAKER_04 11:53

You know, ultimately we see uh yeah, we see a mix, don't we? We see some people that do end up coming back to the banks. You know, do we do we feel that those guys, when it comes to working hours on the whole, though, are you know, I think when we were talking about this before we recorded the podcast, Namisha's view was that um on on average, when it comes to hourly pay, if it did, if that was a real thing or that was uh really considered, uh, that a lot of the guys in the corporates are getting paid more per hour than the bankers. Do you do you still stand by that, Nami?

SPEAKER_02 12:26

Yeah, I do, as I say, from from my experience from speaking to to those that are in the corporates, they're happy there, they're not wanting to move or go back to banking. Um, and I think I think that's for a reason. Um, it's it's because okay, they're not earning the top end of sort of the the director spectrum or whatever level they're at, but hours worked, hourly rate is is good and more than they would get elsewhere.

SPEAKER_04 12:52

Good. Well, look, £2.70 an hour I used to earn at McDonald's, and that's not a joke. That was not a joke. That was back in 1994, £2.70 was my hourly rate, and uh I was a five-star crew member down at McDonald's, and uh I can still yeah, I look I can still tell you quite a lot about the goings-on down there at McDonald's in Chesterfield. Probably probably a conversation for another time, but uh just whenever I think of hourly pay, I remember that £2.70. Every time you got a new star, I remember when I got my fish star, because I uh I I knew I knew for one of the questions on the fish star was how many pounds per square inch uh is it is the pressure inside the bun toaster for the Filio fish buns? Do you know what it was? 40 40 pounds a square inch, which is you know, that's pretty much the same tire pressure inside your tires on your car. That's pretty pretty solid. Pretty solid.

SPEAKER_03 13:53

Anyway, how long did you work at McDonald's for?

SPEAKER_04 13:56

Uh three years. I was suspended.

SPEAKER_03 13:58

Wow. Yeah, I was suspended twice.

SPEAKER_04 14:00

Huh?

SPEAKER_03 14:01

You're suspended twice.

SPEAKER_04 14:04

Uh the first time was um on a drunken night out with some other uh McDonald's colleagues. I overstepped the mark. Uh in good spirits, I climbed over the counter in our McDonald's and helped myself to food. Yeah, I did pay for it. I like went up to the counter and put the money in, but anyway, they didn't think it was funny and I got suspended for it. And um, the second time it was for eating um chicken in the kitchen, which chicken in the kitchen. Yeah, but yeah, pretty bad just standing there eating food. So, but I didn't get fired. I just want to make that clear. I I I resigned in the end, and I went to work in a in a hotel um in Sheffield, by which point I was at university there. So yeah, it was all good. Good memories, good memories, five star, five-star crew member, five star memories. Anyway, good. So, I mean, look, the final question I've got for you guys is, and I think this is interesting, maybe to people that do work for a sponsor, a corporate, a strategic platform, whatever you want to say, who are thinking of a of a move into a bank to come back the other way. Maybe they're returning to that world. How do you think that market perceives them? How do you think, you know, a role in a bank, would is it a turn-off that someone spent three, four years working for a let's say a solar developer? Uh, or could it be seen as a positive?

SPEAKER_03 15:32

I think a positive because I I've had experience placing folks or associates or VPs at developers um at project finance banks. So I I would completely see I think they have a good technical skill set. They're probably gonna get a bump up in compensation. And I think the client likes it. They most of the time they've worked on similar projects. Um, I've seen that a lot. So, I mean, that's my two cents. I don't know if you've seen the same in the UK.

SPEAKER_02 15:56

Yeah, I think fairly similar. I'm just thinking, I haven't have, I don't think I placed a lot of individuals from sponsors in corporates um into banks or debt funds, but I think mostly the reason is just because there hasn't been massive appetite from them to want to leave, um, as opposed to them being an unattractive kind of candidate, let's say, for um, for a particular role. But I think you're right, I think they would have worked on similar projects. And most of them have a previous career in banking that they can utilize if they're perceived to not have kind of the banking skills, if you like. Normally that's where their background is anyway. So yeah, I think they're they're attractive candidates for sure at any level.

SPEAKER_04 16:38

I agree. I mean, look, I in my experience, I think Namisha's right there that if they started their career in a bank and they've got both. So they've got the initial grounding and that sort of credit uh skill set. Um, and then they've been out and spent a bit of time in industry and now they're coming back. I think that can it depends on the person, clearly, but I think it's a really attractive combo. And I think the types of, I think what is attractive, one of the things that's attractive about this is the type of person that does that, that goes on that journey, is usually a pretty desirable type of person to hire. Because it's usually someone who's commercial, got a genuine interest in the space, also not someone who's just obsessed with the money because if they were, why would they have made that move? To G's point, you know, in terms of attracting them, if you're a run-of-the-mill bank, you can still give them a bit of an uplift because they're coming back to a better, a better pay structure. And I just think they bring with them that, you know, that just slightly different perspective of having been on ultimately the client side of the table. So look, you know, there you go. That's that's the maybe the point to uh to make to some of those guys on that uh yeah, in that corporate world, uh, that there is a there is absolutely an appetite for that experience that they've got. Uh, and if they are interested in a significant pay rise, come and talk to OneSearch. There we go. Um, good. Well look, thanks very much, guys. That's a wrap for podcast number five. Most diverse team in uh infrastructure credit recruitment. We'll see you on the next podcast.

SPEAKER_00 18:16

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