Leveraging a booming market

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Australia's booming private equity scene is giving leveraged financiers more leverage than ever before when it comes to negotiating huge packages.

Demand for leveraged finance experts is surging, fuelled by a seemingly endless pipeline of takeovers and mergers requiring teams of investment banks to get them over the line.

"The private equity market has been pretty buoyant over the last couple of years, and as a result of that there's a lot of focus on the debt side from the corporate banks in terms of their leveraged finance teams," says Tim Beach, senior consultant at Robert Walters Australia.

"Ideally banks are looking for like-for-like experience: people with leveraged finance experience ... but that's not always the case. Because it's a growing area, firms are having to pull people in from other debt disciplines to beef up their teams."

Credit Suisse and BOS International have been very active on the hiring front, and international players such as Morgan Stanley and Hypovereinsbank are also said by recruiters to be looking to build leveraged finance teams. Deutsche Bank last month appointed a new head of its leveraged finance team in Australia and New Zealand.

"There's been a lot of hirings going on and post-bonus musical chairs," says Oliver Darkes, senior consultant at Carmichael Fisher.

"For some people there have been a couple of fairly sizeable moves in the marketplace and some ridiculous guarantees going around for people who can originate in that marketplace."

Generous pay deals reputedly include AU$3m guaranteed over two years for a director by a US investment bank.

How long the private equity boom will last is another question. Experts tip another 12-18 months of good times before a possible downturn. Leveraged financiers may be advised to move now - while the going's good.