ProShares, which creates securities traded by hedge fund managers and other sophisticated investors, was finding it difficult to persuade Wall Streeters to work at its headquarters in Bethesda, Maryland. So, on June 20, it opened its first office in New York.
Only a handful of people are stationed at its 3,000-square-foot office on 400 Madison Ave. But Chief Executive Michael Sapir is keen to get his firm's products in front of the city's multitude of investment professionals and is eagerly seeking experienced sales staffers.
"We're in a sweet spot as a business," Sapir said. "We're in an aggressive hiring mode right now."
The arrival of outfits like ProShares illustrates how the city's financial sector has remained surprisingly resilient even as big Wall Street banks are issuing pink slips by the thousands.
Last fall, as headlines screamed of looming Wall Street layoffs, economists warned that the industry would hemorrhage jobs. State Comptroller Thomas DiNapoli forecast 10,000 positions would disappear from the city's securities sector by the end of 2012. The sweeping losses haven't materialized—at least not yet. In fact, the city gained 3,400 Wall Street jobs this year through May. Over the past 12 months, employment in the industry has jumped by about 2 percent, or 3,800 jobs.
Those numbers contrast with national data showing 4,700 securities-industry jobs lost this year. Meanwhile, Britain's Centre for Economics and Business Research in May forecast that London would lose another 30,000 financial jobs this year, bringing total job losses to 99,000 since that nation slipped into recession in 2007.
"You've definitely got a better shot at getting a job in New York than in London," said Umar Balal, a senior headhunter at U.K. recruiting firm Westbourne Partners.
In New York, the Independent Budget Office now believes the city will gain 1,700 securities jobs this year—just months after predicting it would shed 4,300. It's hardly a boom, though, and the gains could vanish quickly should the economy turn for the worse, as happened in 2010 and 2011.
Still, the securities industry has stayed buoyant in part because high-paid investment bankers and traders are only part of the financial-workforce equation. While those high fliers are being let go—for example, Bank of America is sacking thousands of investment-banking employees—banks and other Wall Street institutions are hiring others to prepare for the effects of the Dodd-Frank financial-reform law. JPMorgan Chase CEO Jamie Dimon recently told Congress his bank is spending $1 billion more on compliance costs annually because of Dodd-Frank.
"There's been tons of movement into the whole risk/compliance/regulatory space," said Dawn Fay, New York and New Jersey district president for Robert Half International. "With MF Global [going bankrupt] and [multibillion-dollar trading losses at] JPMorgan, organizations need to hire people and get their arms around the risk side of things."
That's also stoking demand for software experts to help banks track the activity that regulators will be watching closely. JPMorgan alone posted more than two dozen information-technology jobs on the website eFinancialCareers in late June. UBS, Morgan Stanley and Credit Suisse were among other big banks that were hiring through the site.
Regulatory and tech positions don't pay the eye-popping bonuses that overflow city and state coffers with tax dollars, but they are good-paying jobs that add to the city economy. Salaries are about $200,000, plus bonuses.
Another reason that securities-industry employment is holding up is that big-bank refugees are finding jobs in other corners of an industry remaking itself on the fly.
"You have to distinguish between a company's interest and the city's interest," said Frank Braconi, chief economist in the city comptroller's office since 2006. "It may well be that JPMorgan is constrained, but one can be hopeful you can have a thousand flowers blooming by having some of these operations dispersed. That may well be good for financial innovation and financial-industry growth in the long run."
When Goldman Sachs wound down its proprietary trading desk to comply with new federal regulations, that team headed to buyout firm Kohlberg Kravis Roberts. The move hurt Goldman but not necessarily the city economy, because KKR is also based here. Similarly, Apollo Global Management acquired the real estate management group arm of Citigroup.
And then there are startups, a growing part of a city financial industry that never stops evolving.
"Anecdotally, we hear in our talks with real estate people that they are leasing to startups that are hoping to come in under the wire of higher regulatory scrutiny," said Rae Rosen, senior economist at the Federal Reserve Bank of New York. "They tell us there are many people sitting on a lot of money, and they don't think they'll be able to get the same rate of return if they stay at the big firms."