Q3 2026 · Issue No. 02
After a record first half, hiring stayed selective as the quarter cooled: fewer seats, better paid.
Moody's expects the six biggest US hyperscalers to spend about $700 billion on capital projects this year, and more of the data centers behind that spend are being financed in the securitization market. Barclays puts outstanding data center ABS and CMBS at $61 billion, up from $4 billion in 2020, and Compass got the sector's first triple-A from one of the big three rating agencies in February. In July the SEC staff said these deals fall outside the regulatory definition of ABS, which should make new ones easier to bring.
Rating agencies are pointing to termination rights in hyperscaler leases, though, and a few deals this summer had to price wider. The people who know this asset learned it when the market was a fraction of its size, and that experience is in demand as it grows. Here is what we are seeing on the deals, the pay, and the people this quarter.
Managing Partner, Ledgend Group
Record fees, then a softer quarter
The big banks reported a record second quarter in July, with investment banking fees up 55 percent at Goldman Sachs, 58 percent at Morgan Stanley, 50 percent at Bank of America and 30 percent at JPMorgan, led by equity underwriting. By mid September the picture had softened, and Bank of America guided its third quarter fees below last year. Johnson Associates made its year end projections in August on first half results, and they still point to a strong year for bankers and a slower one on the buy side.
| Business line | Projected 2026 incentives | |
|---|---|---|
| Equity underwriting | +20-30% | |
| The fastest growing line at most big banks in the first half, on a busy IPO market, with room above the range. | ||
| Advisory | +15-20% | |
| Set before the third quarter slowed, so the fourth quarter will decide where it lands. | ||
| Debt underwriting | +5-10% | |
| The slowest projected banking line, and the one higher rates press on. | ||
| Large private equity | +2.5-7.5% | |
| Mid and small PE flat, private credit flat to down 10%, both excluding carry. | ||
Those August ranges were set before the slowdown, so treat them as a ceiling rather than a promise until the fourth quarter is in. Equity capital markets bankers had the strongest year and are in the best position going into bonus season. Private equity pay is still projected to lag banking, so bankers weighing a move to the buy side are looking at a slower pay year there, even as the exit market loosens.
| Level | Base | All-in total |
|---|---|---|
| Analyst (Y1-Y3) | $110-150K | $175-290K |
| Flat year over year. Shrinking class sizes are raising the bar per head. | ||
| Associate | $175-250K | $325-525K |
| Elite-boutique all-in now runs $100K+ above bulge bracket at the same level. | ||
| Vice President | $275-375K | $550-850K |
| Still the most active lateral level. | ||
| Director / ED | $350-500K | $750K-1.3M |
| Selective demand. Banks are paying up for portable relationships. | ||
| Managing Director | $500K-1M+ | $1.2M-5M+ |
| Restructuring, healthcare, private capital and financial institutions are where much of the senior hiring is landing. | ||
Associates are hard to keep, and solid VPs are hard to find
The thing we hear most from research heads right now is that they are struggling to hold onto their associates and to find VPs who are ready to step up. Part of that is demand, since equity research is largely funded by the equities business and equities had a remarkable second quarter, almost every research hire announced this year has been a senior analyst, and each new lead analyst or new platform needs associates to build a team around them, while the buy side, with hedge funds coming off their best year since 2009, remains the natural next step for a strong associate.
The VP gap goes back further, because today's VPs would have started as juniors around 2018 to 2020, just after MiFID II's research payment rules squeezed research budgets, and across financial services layoffs outpaced hiring for 28 straight months through the end of 2025. With firms like Jefferies building AI tools for equity research, junior classes may stay lean, which makes the associates a team already has even harder to replace.
Keeping associates will likely take a clear path to VP and pay that keeps up with the buy side. Teams looking for a VP may do better considering a strong senior associate ready to step up than waiting for the rare VP who is on the market.
Fewer people, but senior producers are still in demand
Combined headcount at Bank of America, Wells Fargo, Citigroup, Goldman Sachs and Morgan Stanley fell by more than 10,000 in the second quarter, the largest quarterly reduction in at least six years, and Citi booked about $800 million of severance in the first half with more possible. At the same time the boutiques kept hiring at the top. Evercore added four senior managing directors in investment banking with seven more committed, and Moelis brought on six managing directors with six more committed to join this year. The market for proven senior dealmakers with portable relationships is active, while general and support roles keep shrinking.
AI moved into junior banker work
In September, OpenAI launched ChatGPT for Financial Services, built with Morgan Stanley and Evercore as design partners, to research companies, analyze financial data and build client presentations, much of the work analysts and associates have done by hand. Johnson Associates now lists headcount trimming from AI efficiencies, retaining top talent and revisiting career progression among the trends shaping bank pay.
The junior seat is changing, and candidates who can show judgment and client work, not only model building, will stand out. Firms may keep hiring fewer juniors over time, which puts more weight on the associates and VPs they already have.
Beyond the big banks, firms kept building. Huntington Securities launched an equity research platform in July and Clear Street launched research on private markets in August, while Europe went the other way, with Stifel closing its Zurich and Frankfurt research operations in June.
- DIDan Ives left Wedbush after eight years and co-founded Yorkville Ives & Co., a merchant bank with its own equity research. July.
- MRMichael Rehaut joined independent Melius Research as Head of Housing Research after 24 years at J.P. Morgan covering homebuilders and building products. August.
- BBBryan Baratian joined ROTH as a Managing Director to lead its research on digital assets, AI infrastructure and blockchain. September.
- VLVincent Lovaglio joined Seaport Research Partners to cover US exploration and production, after more than 14 years on the sell side. September.
Senior analysts with a following are finding room at independent and mid-market firms, and new platforms are creating seats that did not exist a year ago.
The market backdrop behind all of it, in three numbers.
Global investment banking fees for the quarter through September 15 versus a year ago, per Dealogic, after a record first half. M&A and debt raising slowed first, which is where higher rates bite.
Jobs cut at five big banks in the second quarter, the largest quarterly reduction in at least six years, even as deal fees hit records.
What KKR made on USI in its roughly $17 billion sale to Aon, as private equity exits finally started moving through sales to strategic buyers.
Our placements, now on the record
We added a Selected Placements page to ledgendgroup.com. It lists senior searches we have closed across investment banking, financial institutions advisory and equity research, from Managing Director to Analyst, with the firms kept anonymous. Three of them are Managing Director seats.
Who is hiring, who is moving, and what it pays in finance, straight from Ledgend Group.
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Boutique executive search: Investment Banking · Private Equity · Asset Management · Equity Research
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