TIMES HAVE been tough at the investment banks. A drying up of deals and a slump in share prices have meant that the knife has been taken to the ranks all the way from graduate trainees through to some of the City's most senior bankers.
Some have used the opportunity to escape from the rat race. But plenty of others have decided to stick it out in the City, using their experience in bulge bracket banks to make a living at some of the myriad of investment boutiques which have sprung up in the past few years.
The sales pitch of the so-called boutiques is that they offer a bespoke service, usually in the field of corporate finance advice. While some offer research and trading facilities as well, many sell themselves on the fact they are free of the possible conflicts of interest highlighted by the Wall Street investigations into bias at some investment banks' research departments, especially during the dot.com boom.
Not all bankers who have joined boutiques found themselves pushed out. In many cases, long-term prospects have just looked unexciting.
Tim Shacklock, a former deputy chairman of Dresdner Kleinwort Wasserstein, earned pounds 26m at the German bank last year and was one of its pre-eminent deal-makers. He quit at Christmas and has now joined Gleacher, a US corporate finance boutique, which is now called Gleacher Shacklock.
Another is Andrew Galloway, a senior banker at HSBC who left the bank with colleague Alan Richards to set up West Hill Corporate Finance, a boutique with fewer than 10 employees working on deals.
One of the most recent boutiques is NewSmith Capital Partners, the new outfit of Michael Marks, a former UK head of Merrill Lynch. Mr Marks' boutique - a play on the jobbing operation Smith New Court he turned into one of the City's biggest market-makers before it was gobbled up by the US investment bank - will be open for business by Christmas, with a total staff of fewer than 30.
While the size of their new companies undoubtedly falls into the bijou category, many of the bankers at their helm do not like the "boutique" label. "We prefer to be known as an emerging investment bank. My image of a `boutique' is what a group of tired corporate financiers set up if they cannot do anything else," said Ian Dighe, the chief executive of Bridgewell, the 70-person strong securities and advisory business bought out of Singer and Friedlander Corporate Finance in 2001.
Mr Marks, one of the best known financiers in the City, parted company with his American bosses last year. "We are not going to be an advisory boutique, a few chaps going around offering advice. We want to offer a full spectrum on the capital markets side, from balance sheet advice to Treasury to corporate finance," he adds.
The message from these senior bankers is clear. They are not just biding their time until the market picks up and opportunities open up again at their former employers. Instead, they believe smaller and more focused houses can offer something fresh to corporate clients, which will last beyond the end of this bear market, while at the same time giving the bankers themselves more freedom to be masters of their own destiny.
"You can't play at this business, you have got to be deadly serious. Companies are getting very, very choosy and there is where our opportunity lies," said Mr Dighe, whose team at Bridgewell have notched up John Lovering, who bid for Somerfield earlier this year, as one of their clients.
Andrew Sibbald, the co-founder Lexicon Partners, the boutique which advised on last month's pounds 100m flotation of the reinsurance broker Benfield, said: "We offer a relationship-based perspective, with a long-term view. …