Which is the hottest area of Australian finance recruitment right now? Look no further than leveraged finance.
With buyouts a big feature of the mergers and acquisitions scene down under this year, both foreign and domestic banks are in the market for leverage specialists as part of structured debt teams. Germany’s HypoVereinsbank and Mizuho of Japan are believed to be recruiting while another German bank, WestLB, recently hired a specialist from Asia.
High-level specialists are, however, in short supply, say headhunters. “It’s the sort of situation where senior people can name the bank they want to work at and you can get them a job,” says one consultant. As a result, bonuses are expected to be comparable or higher than last year and sign-on bonuses are not uncommon.
Patrick Everest, a partner at Jon Michel Executive Search, says: “The market has been busy for the past two years. It’s been exceedingly active and tight for people. Banks are starting to have to think laterally and look at people from corporate finance and financial sponsor-type backgrounds, as well as other structured debt disciplines. Everybody has hired or is hiring, there’s not really any exception to the rule.”
According to a Bloomberg report, buyouts in Australia have risen more than 10-fold this year, fuelled by the country’s strong economic growth and the scrapping of a 30% capital gains tax for foreign investors.
“Everyone is cash and equity laden and doesn’t know what to do with it,” says Oliver Darkes, principal consultant at Carmichael Fisher. “They’ve got to do something with the cash. There are also some riskier deals going on, especially involving bigger banks with balance sheet backing.”
Everest says much of the deal-making is being spurred by private equity firms and buyout funds.
Kohlberg Kravis Roberts & Co. is leading a A$17bn offer to buy Coles Myer, the country’s second-largest retailer, while beer and winemaker Foster’s Group is the subject of speculation about a possible foreign takeover. Buyouts this year have included the A$1.83bn purchase of the Cleanaway waste management group and a A$1.44bn bid for the rest of food group Burns Philp.