Russian M&A is booming. What are the chances of making it over to Moscow?

First the good news. Financial News reports that Jamie Dimon highlighted Russia as a target for organic growth (along with India and China) at last week’s Credit Suisse financial services conference.

Merrill also has big aspirations for the country. The US bank recently opened an office in Moscow and John Thain told the Financial Times that Russia is one of its “important places” as the US economy slows. What’s more, Goldman Sachs has identified Russia as a key area in its global expansion, and recruiters tell us Lehman Brothers is still searching for key staff.

It’s not hard to see why. Total M&A volumes in Russia for 2007 reached $182bn – up from $101bn in 2006 and $59bn in 2005, according to data from Dealogic.

Big, big deals are already happening in 2008 – United Co. Rusal, Russia’s largest producer of aluminium, has its eye on local rival Norilsk Nickel, for $51bn. And Vladimir Putin, ever the banker’s friend, has called for Russian businessmen to invest in foreign companies.

Big deals, small talent pool

Against this backdrop of abundance, the only issue seems to be a lack of local M&A expertise. The investment banking scene in Russia played out like a game of musical chairs in 2007, with Deutsche Bank, Goldman Sachs and UBS all losing top bankers from their Russian operations.

Local Russian banks are joining the recruiting fray – Sberbank, Russia’s biggest lender, recently poached Anton Karamzin, a financial director at Morgan Stanley’s Moscow office.

However, Olga Selivanova, a recruiter specialising in Russia at search firm Morgan Hunt, says things aren’t quite as frenzied as they were: “There is still constant movement between firms, and both Russian and international banks are growing. But rather than employing aggressively across the board they’re picking the right people as the roles come up.”

But you’ll need to speak Russian

This being the case, the likelihood of Western bankers finding new homes in Russia isn’t huge.

Alexei Morozov, head of Russian research at UBS, says: “Last year there was a real difficulty in finding skilled people to fill investment banking roles. Knowledge of the local market is extremely important. Western specialists might not be well suited – particularly for deal-making roles.”

He adds: “Russian businessmen are often very different from western businessmen. But as long as M&A activity continues to expand the roles will be difficult to fill.”