Several high-ranking bankers have left their jobs at major investment banks in the last 13 months amid a surge in U.S. health care deal activity to seek better compensation at boutique investment banks as well as to participate in the growth of the industry at biotech companies themselves.
JPMorgan Chase and Bank of America have both lost senior health care investment bankers to boutique investment bank Guggenheim Partners, showing that banks face challenges in being able to pay competitive rates. The biggest U.S. banks are under pressure from regulators to preserve more capital, rather than use M&A fees to pay higher bonuses.
"The volume of transactions across health care is extreme and so the banker merry-go-round begins," said Paul Heller, the leader of executive recruiting firm Caldwell Partners' financial services practice.
There's been $92.5 billion worth of U.S. health care merger activity so far this year, 73 percent more than in the same period last year, driven by 242 deals. Health care has been the busiest sector for deals so far this year, fueled by transactions such as Pfizer's $17 billion offer for Hospira and Valeant Pharmaceuticals International's $11 billion acquisition of Salix Pharmaceuticals.
U.S. health care investment banking fees, meanwhile, have topped $1.9 billion since January, up more than 37 percent from the same period last year.