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Capital markets bankers reinvent themselves to schmooze SWFs

ADIA

How can you boost your employability if you’re an investment banker working in a region where deals are in the doldrums? The answer, for some, is to start schmoozing with sovereign wealth funds.

Michael Bevan, who headed up the equity capital markets operations of HSBC in the Middle East, is relocating to Hong Kong to focus on building relationships with sovereign wealth funds in Asia. He follows Evans Hajitouma, head of ECM for CEEMEA at HSBC who moved to London to head up the bank’s sovereign wealth fund coverage division late last year.

Then there’s Umair Naqvi, who left his role as an executive director in Morgan Stanley’s equity capital markets team to head up Wells Fargo’s SWF coverage. Bank of America is also building its investment banking team in the Middle East in an attempt to garner more business from the region’s SWFs.

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This may seem all a bit 2008, when most global investment banks started to build out their SWF coverage teams in emerging markets only to slowly gravitate them back into core investment banking divisions. Zabaid Ahmed, hired by Citigroup in 2010 to lead its SWF coverage initiatives from New York, is still in the role, while Rebecca Manuel is the long-standing global head of SWF coverage at RBS. Others have moved on – of the three bankers hired to focus on SWFs at Morgan Stanley in 2008, only Hugo Parsons, who is now head of origination for EMEIA, private equity and SWF clients at Ernst & Young in London, still works with the large sovereign funds.

“The redefinition of a number of investment bankers positions into SWF coverage is more about demonstrating a commitment to these funds than building out huge teams in this area,” said Peter Greaves, managing director of IES HR Consultants in Dubai. “It’s clear that a number of investment banks need to start focusing more on the large sovereigns, and some are shaking up their teams internally.”

ECM markets in both Asia and the Middle East remain challenging. This is expected to continue in Asia, whereas ECM underwriting fees in the Middle East were just $43.1m, down by 35% on an already slow comparable period in 2012, according to Thomson Reuters.

By contrast, SWFs have been involved in some big IPO deals this year, such as Malaysia Development Bhd’s planned $1bn of its energy assets, and have also unveiled over $15bn worth of M&A transactions so far this year, according to Dealogic, with the Qatar Investment Authority and Singapore’s Temasek particularly active.

“Some banks are weak in their sovereign wealth fund coverage and recognise a need to increase their teams in this area,” said Bill Allum, a managing director who focuses on emerging markets at headhunters Execuzen.

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